Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — TRANSPORT

Road Passenger Services (Licensing System)

Mr. Luce: asked the Secretary of State for Transport whether he will reform the Traffic Commissioners' licensing system.

The Under-Secretary of State for Transport (Mr. John Horam): The general question of the need for changes in the licensing system is among the matters on which we have been consulting prior to the issue of the forthcoming transport White Paper. The Government's rural transport experiments, with the Experimental Areas Bill that has now been introduced in another place, will test the case for general amendment of some aspects of bus licensing law.

Mr. Luce: Does the Minister accept that this system was introduced nearly 47 years ago, and has become both bureaucratic and cumbersome, and inhibiting to innovation? In the light of this, will the Government undertake an urgent and major review of the system with a view to facilitating the provision of mini-bus transport for rural areas by voluntary bodies?

Mr. Horam: On the contrary, I think that the system is a good deal more subtle than the thinking of many of its critics. But obviously there is a case for looking at the system, which was introduced a very long time ago. We are doing precisely that, and doing so urgently in our consultations prior to the issue of the White Paper.

Mrs. Bain: Will the Minister give particular attention to licensing that affects school transportation? Where controversy arises, will he see that the dates of appeals are brought forward at the earliest possible opportunity?

Mr. Horam: I think that the dates of appeal should be given priority. If the hon. Lady has any particular instances in mind I shall look into them. The Traffic Commissioners do their best in this respect. School transport should be looked at in consultation with the Department of Education. I am very conscious of the problems that exist in that area.

Mr. MacFarquhar: Many of my constituents—both local authorities and private citizens—regard the Traffic Commissioners as something like Marie Antoinette; they seem to think that the answer to higher fares is "Let them drive cars". Will the Minister undertake, in his directives to the Traffic Commissioners, to insist that they take account of social problems in the rural areas?

Mr. Horam: I understand my hon. Friend's feeling about the system, but I must point out that there is a great deal of flexibility within it, which is not always fully brought out by local authorities. Local authorities now have responsibility for devising good transport systems that take account of social needs in rural areas, but many authorities do not take full advantage of the existing licensing system. I wish that they would do so to a greater extent.

Mr. Paul Dean: Does the Minister recognise that private operators could do a great deal to supplement the services of public operators? Will he give an assurance that his proposed legislation will allow experiments in all parts of the country—bearing in mind that conditions vary—to ensure that there is an improvement in services, rather than the decline that has been going on in country areas for far too long?

Mr. Horam: I accept that there is a need for unconventional experiments, including the use of private as well as public operators. We have always accepted that. We have tried, given the limits of resources, to concentrate on experiments in four particular areas. These experiments will be very thorough


and we shall draw general lessons from them. Circumstances vary from area to area, and the Bill is an enabling measure which will allow other areas to follow on if this is necessary. We are concentrating on the rural areas in the first instance because these are the worst hit.

Mr. John Ellis: Is the Minister aware of the impact of the opening of the Severn Bridge—[Interruption]—I am sorry, the Humber Bridge, on transport in my constituency? The county council has been doing an immense planning exercise on this and it has not been helped by British Rail pre-empting the situation and announcing, without studying the proposals, that when the bridge opens British Rail's ferry will close. This has not been at all helpful.

Mr. Horam: I am glad that my hon. Friend has found the right estuary. I understand his concern about the British Rail ferry, but to my knowledge there are no proposals at the moment to close the ferry. Any such proposal would have to go through a long series of consultations beforehand, as laid down in the law.

Mr. Norman Fowler: Returning to licensing, is not the essential argument against the system the fact that the delay and bureaucracy within it prevent new services for the public from being developed? An example of this is the proposal for commuter coach services. Will the Minister tell the House whether he supports such an experiment to help commuters, and, if not, why not?

Mr. Horam: On the first point, about the existing system, I agree that in some circumstances it may inhibit unconventional services, but it also protects the existing conventional services. Unconventional services are not entirely necessary to transport needs, whether we are talking about commuters or about rural areas. But we shall always need conventional services, and my Department is determined to protect these.

Rural Transport

Mr. Peter Mills: asked the Sercetary of State for Transport what plans he has to improve transport in rural areas; and whether he will make a statement.

Mr. Horam: The Government continuously assist rural transport through transport supplementary grant; our programme of rural transport experiments will be operating on the ground this summer; and the issues affecting rural transport are included in the review of transport policy on which my right hon. Friend and I are now engaged.

Mr. Mills: Whatever the Minister says, many people in the rural areas think that the Government are dragging their feet on these matters. We need action. Does the hon. Gentleman realise the problems that rural people face? There is continual depopulation. It does not pay a man to go to work, because of the costs of travel. Will the Minister start to take action by reforming the licensing system and allow the growth of unconventional means of transport in rural areas?

Mr. Horam: We realise that problems in rural areas are severe. I do not think there is any doubt about the feeling of the House on this matter. We are looking into it urgently as part of our general consultations. The hon. Member will have a ringside seat in these matters, because some of these experiments are taking place in Devon. They will take account of the conditions in his area The Government have accepted all of Devon's bid for bus support in 1977–78, so by that means the Government are once more showing their concern for the continuation of rural bus services.

Mr. George Rodgers: Does my hon. Friend agree that one method of improving transport in rural areas would be to persuade bus operators that the school leaving age is now 16? Is he aware that the operators continually charge full fares for children of 14, 15 and 16 years who are travelling to and from school? Is this not scandalous?

Mr. Horam: Concessions, or lack of them, by the National Bus Company are unfortunately a matter entirely for the company. It is not a matter in which the Government have any statutory rôle. It is, therefore, specifically outside my competence. However, it is something about which we must be concerned, and we are very anxious to reach sensible conclusions about it.

Mr. Temple-Morris: Does the Minister acknowledge that co-ordination of the various forms of rural transport is vital? Can he assure us that consideration is being given to this point in the various experiments that are taking place? In addition, will he say what consultations he has had with, for example, the Post Office union, which has had difficulties in getting postmen to run post-buses? That is one of the most obvious forms of such co-ordination.

Mr. Horam: The hon. Gentleman is right; co-ordination is important. We are conducting about a dozen different forms of experiment, and part of the point of them is that some will feed into others. There will be a low-key service in some areas, with a low demand, which feeds into a denser traffic pattern nearer a town. We also have consultations with the unions that are on the committee that is steering these experiments, and we take full account of what they say.

Policy

Mr. Rathbone: asked the Secretary of State for Transport whether he has now abandoned the integrated transport policy; and whether he will make a statement.

The Secretary of State for Transport (Mr. William Rodgers): No, but the hon. Member must await my White Paper for the full development of my views.

Mr. Rathbone: Is the Minister aware that for many hon. Members the Government's integrated transport policy has consisted of stumblings and shifts from one policy to another? Many will appreciate the calls upon the Minister's time of some of his extra-ministerial activities, but will he reassure the House that his White Paper will take notice of the more than local but less than national needs of rail and road transport in the South-East?

Mr. Rodgers: I cannot go along with the hon. Members preliminary comments, but I agree that when the White Paper comes it will deal in local, national and regional problems. All these matters must be considered, and I hope that they will be discussed in the House between now and when the White Paper is published.

Mr. Flannery: When the Minister formulates his White Paper, will he take

into account the fact that many of us consider that the railways are taking a considerable blow, and that although this is happening people who are not taking note of it scream like mad when there is a half-day strike on the railways? Only then do they realise how necessary the railways are. Many of us believe that there is a hidden cash subvention to road transport, on a grand scale, through the under-taxation of heavy lorries, for instance, which militates against the railways, and that in time, if we are not careful, this will run the railways down beyond repair.

Mr. Rodgers: Some more specific Questions related to my hon. Friend's supplementary question appear later on the Order Paper today. However, in general he is right in emphasising that the railways must have a central role in our transport system. I hope that in due course the discussions that I am having, together with the White Paper, will return some confidence, in so far as it is now lacking.

London Rail Advisory Committee

Mr. Spearing: asked the Secretary of State for Transport what meetings he has had with the Chairman of the London Rail Advisory Committee.

Mr. William Rodgers: I met the chairman on 27th January.

Mr. Spearing: Does my right hon. Friend recall that it has taken over two years to set up this committee? Does he realise that that is seen by some as confirmation that neither the Department of the Environment nor the present Department of Transport sees the need for co-ordinating services in the London area? When he next meets the chairman, will he ask him to answer with his own signature letters sent to him by MPs and not leave it to one of his officials to reply in his stead?

Mr. Rodgers: I am sure that the chairman will take note of my hon. Friend's final comment. As for setting up the committee, I agree that it took some time, but I do not think that responsibility for that can lie at my door or that of my Department. I am glad to see that since it was set up it has had a number of meetings. The fourth will take place today. I agree about the importance of the work of this committee.

Mr. Skinner: I wonder whether my right hon. Friend might just bump into the chairman on his way to the meeting at Central Hall on 19th February, when he, with part of the Labour movement—those who have been secretly invited—will be discussing the distress and disquiet in the movement over wages being kept down and prices going up, the transfer from road to rail, and all the other things that he, as a Cabinet Minister, has been involved with as closely as anyone else.

Mr. Rodgers: I am sorry that my hon. Friend has so many complaints about his Government, but I think most of them would be unsuitable for discussion with the chairman.

Roads (Edge Markings)

Mr. Edwin Wainwright: asked the Secretary of State for Transport if he will now take action to have more extensive use of continuous edge of carriageway road markings in non-built-up areas in order to reduce the number of road accidents.

Mr. Horam: Not at present. We shall, however, look at the two-year results of the trial in East Sussex when they become available and will study these together with reports from highway authorities to see whether there is any need to revise present design policies.

Mr. Wainwright: Will my hon. Friend have a more serious look at this matter? It is estimated that a national programme of putting edge lines on our roads in non-built-up areas would save about 500 lives and 9,000 injuries. Will he therefore have consultations with local authorities and press that these edge lines should be provided throughout the country?

Mr. Horam: We take this matter seriously. The results of the first 12 months of the East Sussex experiment are very striking, but we have often found, in looking at these experiments, that after an initial period the savings decline, and therefore we want to let this experiment proceed for two years to judge the total effect. Experiments in other countries have provided contradictory evidence about the effect on road safety. However, my Department is asking local authorities to explain their policies of edge marking

and the extent to which it has been used. We are therefore gathering all the evidence to us, to see what has been happening.

Mr. Mudd: In his approaches to highway authorities will the Minister also ask them to consider the effects of edge lining in terms of savings on road maintenance costs by keeping vehicles away from the kerb?

Mr. Horam: Edge lining reduces haunch distress—[Interruption.] That is an extraordinary term, and I could not possibly explain it. Perhaps the House has some idea of what it means. Edge lining leads to a reduction in maintenance costs. That is another advantage of examining this system seriously.

Mr. Wainwright: On a point of order, Mr. Speaker. In view of the very unsatisfactory nature of the reply, I beg to give notice that I shall seek leave to raise the matter on the Adjournment at the earliest possible moment.

Road Tax

Mr. Ronald Atkins: asked the Secretary of State for Transport over how many years the tax paid by road users has exceeded current and capital expenditure on roads as stated in Volume 25.27 of the transport consultation document.

Mr. William Rodgers: The tax paid by road users overall has exceeded current and capital expenditure on roads for at least the last 25 years.

Mr. Atkins: Is my right hon. Friend aware that the interest charges on the capital costs of the inherited road network of the pre-motor age were estimated in 1962 by Professor Hondelink to be £800 million a year? That figure has been brought up to date by the Library, and taking into account higher interest charges and lower money values approximates to £5,900 million a year—

Mr. Speaker: Order. That is very useful information, but we must have a question.

Mr. Atkins: Should that figure not modify the glib assumption of the unfortunate writer of paragraph 27?

Mr. Rodgers: The answer could be "Yes" and the answer could be "No"


—if my hon. Friend does not regard that as being unreasonably indecisive. I should like to read very carefully what my hon. Friend has said before hazarding a final answer.

Mr. Fry: Is the right hon. Gentleman aware that some of us do not want to live in the past like the hon. Member for Preston, North (Mr. Atkins) and are more concerned about the present and the future? Does the right hon. Gentleman's answer not clearly show that the road programme has, in effect, been effectively cut back so that subsidies may be granted to rail? Further, does he agree that all the statistics show that road is by far the major mode of transport and that by all tests of efficiency greater amounts should be directed towards that programme than to other methods of transport?

Mr. Rodgers: With respect, I do not think that any such conclusion could be drawn from my reply, which was very simple in its nature. Road users overall have paid more in tax than has been spent, but if I were to supply a supplementary answer to the hon. Gentleman I should be prepared to say that within that total there have been some differences that many Members would regard as anomalies.

Modes of Transport (Energy Efficiency)

Mr. Forman: asked the Secretary of State for Transport, to what extent his Department will take account of the energy efficiency of different modes of transport when formulating its forthcoming White Paper.

Mr. Horam: I shall be taking full account of energy considerations, on which my Department has been working with the Department of Energy. But the comparative energy efficiency of different transport modes is not easy to establish or quantify, and it will also have to be weighed with other considerations.

Mr. Forman: Does the hon. Gentleman accept that in the longer term—perhaps over 15 to 20 years—it is vital for any Government to pay great attention to the energy efficiency of different modes of transport, especially as on present calculations the commuter train is about six times more energy-efficient than the commuter car with one person in it and a fully

laden double-decker bus is about 12 times more efficient than the commuter car? Will the hon. Gentleman take these matters fully into account?

Mr. Horam: Yes. We are very conscious of the extremely important questions that are posed for transport policy not only in the light of the general prospects for the supply of oil but the price of oil over the next 15 to 20 years. I can assure the hon. Gentleman that the Department, through the Transport and Road Research Laboratory, has undertaken a continuous programme of research to examine the energy efficiency of different modes of transport, both conventional and unconventional.

Mr. Stan Crowther: Will my hon. Friend pay special attention to the energy efficiency of waterborne transport? Will he bear in mind that in terms of fuel costs the price per ton mile of transporting goods by water is approximately one quarter that of transporting goods by road? In view of that, will my hon. Friend try to persuade the Prime Minister that the commercial use of waterways should be his responsibility rather than that of the Minister with responsibility for sport?

Mr. Horam: I am reluctant to take initial responsibilities from my right hon. Friend the Minister with responsibility for sport. I should prefer to have sport rather than waterways. However, my hon. Friend is absolutely right. With regard to freight, water transport is more energy-efficient than trains, and trains are more energy-efficient than road vehicles. There is a clear case for including water transport within the Department of Transport.

Rail Subsidies

Mr. Newton: asked the Secretary of State for Transport what will be the direct effect on commuter rail fares in London and the South-East of the suggestion in the transport policy consultative document about phasing out subsidies.

Mr. William Rodgers: There is no suggestion in the transport consultation document of phasing out subsidies to London and South-East commuter services entirely. In any event, the level of fares depends on other factors besides the level of subsidy.

Mr. Newton: Will the Secretary of State give a straight answer to the question whether he accepts British Rail's estimate that the objectives set mean a 7½ per cent. increase each year from now until 1981 in real terms in these fares? If so, does he not accept that he must reconsider this matter, or at least persuade the Chancellor of the Exchequer to do something about tax relief on travel-to-work costs?

Mr. Rodgers: I do not think that there is any very great prospect of the Chancellor acting on the hon. Gentleman's last comment, but that is a matter for the Chancellor and not for me. The matter is more complicated that the hon. Gentleman suggests. There is no question of my having taken a final view yet. The consultation document is still being discussed in the House and elsewhere. Many factors are involved in the number of passengers carried and the level of revenue. That is what I was trying to say.

Mr. Spearing: Does my right hon. Friend remember that in the debate on London commuter fares on 12th November, various suggestions were put forward whereby those paying substantial commuter fares could get offsetting arrangements for off-peak periods and the citizens of London could make better use of their own rail network? What steps has he taken in that respect?

Mr. Rodgers: As I think my hon. Friend knows, it is not for me to take direct executive steps. I do not possess those powers, becaue they have not been given to the Secretary of State by Parliament. I know that my hon. Friend' suggestions, many of which were ingenious, have been noted by those concerned. I think that we shall see the results, such a they are, in due coure.

Mr. Rathbone: In this context, will the right hon. Gentleman deny once and for all the rumour that is being put about by some of those on the Labour Benches that commuter services are used only by the better-off? Will he bear that in mind when he formulates his policy?

Mr. Rodgers: I do not think that anything has been said as explicitly as that. I have said that if we have limited sums available for revenue support and for

subsidies we must ensure that such support goes where it is most needed. If those sums are not raised in fares, they are raised eventually from the taxpayer and ratepayer. If there is to be cross-subsidisation, we must ensure that the money is not wasted.

Mr. Ovenden: Is my right hon. Friend aware that the majority of commuters come into London to work not by choice but because of the economic structure of the South-East Region? Is he aware that unless his Department is prepared to give proper financial support to the London commuter rail system it will have to shell out more money in tackling the road congestion caused in London and on the outskirts?

Mr. Rodgers: I respect my hon. Friend's views. He has been persistent in advocating them in the House. I entirely agree that if we are to save money on the railways we shall have to consider the alternative costs involved. At the same time, those who choose or have chosen over a period of years to live outside London have done so for a variety of good and sufficient reasons. We must ensure that there is a balance between those who have chosen to live in the centre of cities and those who have chosen to live outside. We must ensure that everyone pays fairly—neither more nor less than fairly—towards the total cost.

Mr. Crouch: I put it to the right hon. Gentleman that he cannot brush this question aside in that manner with such a great macro-economic answer. There are several thousand commuters in my constituency, paying over £500 a year for the pleasure of travelling for five hours each day to and from their work. I do not know how school leavers, who probably earn up to £1,500 a year, do it. The Minister cannot stand and sit there—

Mr. Speaker: Order. I remind the hon. Gentleman that, in his gymnastics, he has not yet asked a question.

Mr. Crouch: When the Minister stands to reply, I hope that he will tell my commuters how the hell they are to manage in future.

Mr. Speaker: Order. I remind the House that I very much deprecate that


sort of language here, whatever language is used elsewhere.

Mr. Rodgers: I do not think that anyone would accept that I have tried to brush this complicated question aside lightly. Many factors come into this. Whereas it is right for hon. Members to assert vigorously the positions of their constituents, I have an obligation to consider all factors, which includes those living in London and those living a long way from London. I have said that we must not have indiscriminate cross-sub-sidisation. We must have a fair sharing of the burden.

Road Traffic Acts

Miss Joan Lestor: asked the Secretary of State for Transport what recent representations he has had on the working of the Road Traffic Acts.

Mr. Horam: We are continually receiving views on road traffic law.

Miss Lestor: May I remind my hon. Friend of the correspondence that I have had with his Department about the anxiety of some ambulance drivers in my area over the application of the Road Traffic Acts to the ambulance service? Are any other authorities expressing this anxiety, particularly in relation to shortage of staff and emergency services?

Mr. Horam: No. We have no evidence that other authorities are expressing anxiety on this point. We have had no specific correspondence from other authorities, so I cannot substantiate my hon. Friend's point. We are aware of the problem. Essentially, the Department of Health and Social Security is responsible, and it believes that the system of applying the drivers' hours legislation to ambulance drivers is broadly correct. It is, in the main, a regular service, which is rostered in the normal way. It is felt to be satisfactory at the moment. I ask my hon. Friend to take up the matter with the DHSS if she feels that the situation is still unsatisfactory.

National Freight Corporation (Chairman)

Mr. Viggers: asked the Secretary of State for Transport when he intends to meet the Chairman of the National Freight Corporation.

Mr. William Rodgers: Shortly.

Mr. Viggers: I am grateful to the Secretary of State for that comprehensive reply. When he next meets the Chairman of the National Freight Corporation will he tell him that the grounds put forward currently by the NFC for requiring a further £50 million are far from clear? Will the right hon. Gentleman, without further delay, publish the report on the NFC by Coopers and Lybrand, which has been in his hands since last summer, so that we can all see what the country is getting for its money?

Mr. Rodgers: I do not think that it would be any more proper for me to publish a confidential commercial report of that kind than that I should expect such reports to be published in different circumstances affecting the private sector. I take the hon. Gentleman's point. We discussed this matter on the Second Reading of the Transport (Financial Provisions) Bill recently. The Bill will shortly be going into Committee, and the hon. Gentleman will no doubt be free to pursue the matter in detail there.

Mr. Raphael Tuck: When my right hon. Friend next meets the Chairman of the National Freight Corporation will he discuss with him the unfair competition between rail and heavy commercial lorries, which are being cross-subsidised by non-commercial users of roads? Is he aware that, for example, the wear and tear on roads made by a 12-ton lorry is 160,000 times the wear and tear made by a car? Will he bring in a differential system of taxation?

Mr. Rodgers: My hon. Friend has made some important points, which are familiar not only to the House but to the Chairman of the National Freight Corporation. There are later Questions on this matter on the Order Paper.

Mr. Moate: Does the Secretary of State realise that his answer to my hon. Friend the Member for Gosport (Mr. Viggers) was grossly unsatisfactory? How can he ask the House for £50 million as an interim grant without giving any information about the restructuring proposals for the National Freight Corporation? If he will not publish the Coopers and Lybrand report, will he tell us what his proposals are?

Mr. Rodgers: I should not wish to deny the House any relevant information about restructuring. I am sure that that will be one of the matters that will be discussed when the Bill goes into Committee. If there is any further information that I can give the House, I shall do so. I made clear on Second Reading that a number of changes were being made. I shall keep the House fully informed.

Mr. Jay: As the Government are so much in need of revenue, how soon will they introduce the heavier taxes on large lorries, which were recommended months ago by the Government in thir own consultative document?

Mr. Rodgers: I cannot speak for the Chancellor of the Exchequer. As my right hon. Friend knows, certain progress was made in the course of last year's Finance Bill. This matter was made clear in the consultative document, as my right hon. Friend said. I entirely accept that heavy lorries are paying less than their fair share for wear and tear on the roads.

Mr. Raphael Tuck: Many thousands of pounds less.

Mr. Hal Miller: Will the Secretary of State tell the House whether, in advance of his meeting with the Chairman of the NFC, he sent him a copy of the revised first draft directive, dated 2nd June 1976, for the assimilation of national taxation systems on heavy lorries? If so, why is it not yet available to hon. Members?

Mr. Rodgers: The answer is that I did not send it.

Written-Off Motor Vehicles

Mr. Spence: asked the Secretary of State for Transport what representations he has received about written-off motor vehicles being put back on to the roads.

Mr. Horam: Views have been received from various sources, including certain bodies representing the motor trade, road users and consumers. It has been urged that vehicles that have been repaired after write-off should be tested before being allowed on the road again.

Mr. Spence: Is the hon. Gentleman aware that that is an extraordinarily complacent answer to this important matter? Will he undertake now to act with urgency in an effective way, so

that the public may be assured and reassured that the Minister is on top of the job with regard to road safety and the public interest?

Mr. Horam: I assure the hon. Gentleman that the Department of Transport is absolutely on top of the job with regard to road safety. I take this problem as seriously as it should be taken. The hon. Gentleman will know, as the matter has been discussed at length, that we have always sought clear evidence on the extent of the problem. That is what we are looking for now. On Monday I received a deputation from the hon. Members for Sutton Coldfield (Mr. Fowler) and Essex, South-East (Sir B. Braine), and they gave me further evidence. As I undertook then, I shall certainly look into it.

Mr. Norman Fowler: Is the hon. Gentleman aware that both the motoring and consumer organisations support action to prevent these patched-up insurance write-off cars going back on to the roads? Is he also aware that the overwhelming feeling of those organisations is that the Government are dragging their feet on the issue? Cannot the Government, even now, say that they will institute a survey to find out how serious this problem is throughout the country?

Mr. Horam: The hon. Gentlemam must know, unless he has an extremely short memory, that that was the undertaking that I gave on Monday. I said then that we would look at any evidence that was brought forward. So far, after many years of intensive research, including a working party lasting three years, with which my Department and all the interested bodies co-operated, we have not come across any evidence to suggest that this is a major problem. None the less, in view of the real concern, which I understand, we shall continue to study the problem.

Speed Limits

Mr. Nicholas Winterton: asked the Secretary of State for Transport how many representations he has had on the question of the 50 and 60 mph speed limits; and whether he will make a statement.

Mr. Budgen: asked the Secretary of State for Transport how many representations he has received on the question of


the 50 and 60 mph speed limits; and whether he will make a statement.

Mr. Horam: Of the 54 representative organisations consulted, 39 have sent their views. Hon. Members have forwarded 29 letters from their constituents for comment and there have been 73 letters from members of the public. My right hon. Friend is considering the views expressed and expects to announce the Government's decision on the future level of limits before Easter.

Mr. Winterton: Will the Under-Secretary of State indicate the results of the widespread consultation that his Department has had with interested bodies? Does he agree that if legislation is introduced because of a crisis, that legislation should disappear when the crisis goes? Does he agree that this law, which is being widely flouted—the police will verify that they cannot act—weakens the whole fabric of traffic law?

Mr. Horam: The replies are not yet complete. It would therefore be premature for me to give any general observations about the nature of the replies. However, most bodies that have replied so far think that speed limits should be justified on road safety grounds. We particularly asked people to comment on the level of observance of the law. In general, I accept that if laws are not observed the fabric of the law is undermined.

Mr. Budgen: Does the Minister agree that the overwhelming majority of representations argue that the case on road safety grounds has not been made out for these limits, and that they should be scrapped?

Mr. Horam: The limits were introduced not for road safety reasons but because of the energy crisis. We are reconsidering them with both those matters in mind.

Mr. MacFarquhar: Will my hon. Friend concentrate less on speed and bend his mind more to the question of road safety? Will he bear in mind that my constituents did not agree with his Department's finding that raising the speed limit from 30 mph to 40 mph in rural areas, with narrow bending roads, was conducive to road safety?

Mr. Horam: From our regular correspondence I know that my hon. Friend and I occasionally have differences of opinion about the right level for speed limits, particularly in his constituency. The general policy of my Department is to try to achieve those speed limits that will stick and make sense. If particular laws are not observed we shall have trouble later. I take my hon. Friend's point that we should also pay attention to the feelings of local people who are involved in changes in speed limits. Often the only thing that local people can do to protect their locality is to restrict the traffic that travels through it.

Mr. Moate: Is the Minister aware that we have had these temporary limits—which have been extended time and time again—for three years? Does he accept that the time has come for the dithering to end? Will he give an assurance that he will not ask for yet another extension of the limits and that he will put legislation before the House in ample time for it to be considered?

Mr. Horam: I can assure the hon. Member that we are not asking for another extension, and that we shall not ask for one. The six-months' extension was designed to allow time for consultation with a view to working out a permanent system.

Transport Industries (Nationalisation)

Mr. Hodgson: asked the Secretary of State for Transport whether he will now announce the abandonment of all further plans for nationalisation of the transport industries; and whether he will make a statement.

Mr. William Rodgers: No, Sir.

Mr. Hodgson: In the light of that reply, will the Secretary of State accept that his failure to give a clear undertaking about his party's and his Government's future plans for the road haulage industry is gravely damaging the efficiency of, and the prospects for, that vital industry?

Mr. Rodgers: I do not accept that. The road haulage industry is getting on nicely, thank you. My White Paper is coming out in May. We must be reasonably relaxed about the situation.

Mr. Loyden: Is my right hon. Friend aware that the nationalisation of the docks industry has been on the Labour Party's agenda for 25 years? Is he aware that workers are becoming cynical about the lack of policy of the Government, or their desire to implement that nationalisation? Does he agree that the growing concern among workers in the industry, such as those at the port of Preston, indicates the need for a sensible, planned transport policy?

Mr. Rodgers: I agree that the subject of the condition of the ports and their ownership has been on our agenda for a number of years. The Preston situation is a matter for the Preston council, and I have no statutory powers in that direction. The pressing business of this Session has ruled out the possibility of a Bill involving the wider nationalisation that my hon. Friend mentioned.

Mr. Viggers: Is the Secretary of State aware that he has a first-class record of achievement on ports nationalisation? If he maintains his present record he will have support from Opposition Benches.

Mr. Rodgers: The hon. Member tempts me to abandon my record.

Mr. Robin F. Cook: Does my right hon. Friend recollect that the Leader of the Opposition voted for the denationalisation of the National Freight Corporation, which has only 10 per cent. of the predominantly private market? Does he agree that doctrinaire and dogmatic attacks on the competition between private and public enterprises are gravely damaging to the morale of the management of the corporation, which is trying to make a success of the mixed economy?

Mr. Rodgers: My hon. Friend is correct. There has been some shocking irresponsibility on the Opposition side of the House. Opposition Members voted in favour not only of the denationalisation of the National Freight Corporation but of the denationalisation of the British Steel Corporation. I am not surprised that morale in some of the nationalised industries is low. Some unthoughtful and unfair attacks have been made.

British Railways (Chairman)

Sir J. Langford-Holt: asked the Secretary of State for Transport when he

next intends to meet the Chairman of British Railways.

Mr. Cormack: asked the Secretary of State for Transport when he next intends to meet the Chairman of British Railways.

Mr. William Rodgers: Later this week.

Sir J. Langford-Holt: Will the Minister take the opportunity of telling the Chairman of British Railways that the principle of public accountability means little unless more information is given about the cost of the railways? Will he tell him that it is unsatisfactory for an enormous amount of public money to be spent without further information being given to the House?

Mr. Rodgers: I know that the Chairman of British Railways studies Hansard with care. I am sure that he will note the hon. Member's question. If the hon. Member has specific suggestions to make he should write to me.

Mr. Cormack: Will the Secretary of State make a special statement to the House after he has seen the chairman of the board? Is he aware of the substantial disquiet in the House and in the country about the accountability of the board?

Mr. Rodgers: I do not think that that is a matter that lends itself to a statement to the House. We have debated the accountability of nationalised industries many times over the last 30 years. No one has found quite the right answer. The National Economic Development Office has recently published a report, with which the House is familiar. We must go ahead and try to find a better way of dealing with these matters. If the hon. Member has any specific suggestions he should make them in writing. I shall read them and pass them on.

Mr. Buchanan: When my hon. Friend meets the Chairman of British Railways will he draw his attention to the increasing number of breakdowns on the railways? Will he urge upon the chairman the need for reinvestment and the purchase of rolling stock in Scotland?

Mr. Rodgers: I am sure that the chairman will note that point, because he is anxious to ensure that his period as


chairman results in an improvement in the standards of the railways and a rise in the confidence of those who work for British Rail.

Car Parks (Licensing)

Mr. Stanbrook: asked the Secretary of State for Transport what is his policy with regard to the licensing of off-street car parks.

Mr. William Rodgers: I am continuing to consider parking policy during the preparation of my White Paper.

Mr. Stanbrook: Is the Minister aware of the latest spiteful idea of the Labour-controlled "lame duck" Greater London Council to penalise private motorists? Is he aware that most motorists who bring their cars into London do so—despite the difficulties of parking and congestion—for business reasons? Surely they should be given encouragement and not discouragement.

Mr. Rodgers: I do not believe that I should condemn the action of a properly elected authority in the exercise of its powers. There are different opinions about parking in London. One must find a balance. The unrestricted use of the private car is impossible without major road improvements, which we cannot afford. There should be a high degree of local option. Those who are in control should decide, and if they are wrong the ballot box will show them.

Mr. Ovenden: Will my hon. Friend explain how he can help local councils that want to ban heavy lorry parking in their areas but are deterred because of the expense of signposting?

Mr. Rodgers: That is a new point, and I shall be very glad to consider it.

Mr. Norman Fowler: Surely the trouble with the kind of restrictions being proposed for cities such as London is that they ignore the legitimate needs of motorists. Is the right hon. Gentleman not aware that many motorists, such as business motorists, for example, actually need their cars to enable them to work? Therefore, does he really believe that in-sports clubs and other organisations. All these bodies have missed many millions of pounds because of the dilatory action

Mr. Rodgers: Indiscriminate restrictions are as bad as indiscriminate parking. That is why I say that a balance must be struck. Certainly it is a great convenience for many to be able to use their private cars, and I would be prepared to accept that for some it is a necessity; but it is not a necessity for all. Serious problems are caused for the majority of people working in our great cities if those who want to bring in a private car restrict in some way the free flow of public transport or, alternatively, there have to be massive new roadworks and developments of one kind or another. The use of a degree of common sense is the best way of solving the problem.

M1 (Lighting)

Mr. Dudley Smith: asked the Secretary of State for Transport why, in the interests of road safety, he will not provide lighting for the M1 motorway from the Newport Pagnell service station to the lighted section of the motorway south of the Watford Gap area.

Mr. Horam: The lighting of this length of the M1 is not at present justified.

Mr. Smith: Surely the Minister knows that lighting of motorways at night is perhaps the biggest safety factor. As the M1 is our busiest motorway, although this is a question of priorities in expenditure, is this not perhaps the biggest priority of all?

Mr. Horam: I agree with the hon. Gentleman that it is an extremely highly rated safety factor. We have done a great deal on the M1, as he will be aware. The problem with this section, which we looked at very thoroughly, along with the rest of the M1, was that it did not rate as highly as the other sections. That was confirmed by the chief constables, who also looked at the matter carefully. None the less, we shall continue to consider this matter to see whether we can include it.

Mr. Gwilym Roberts: I am, of course, always anxious to support the Opposition in their calls for additional public expenditure. Will my hon. Friend the Minister look not only at this section of the M1 but at other accident black spots, particularly those due to fog, in other parts of the country, and give some idea of what plans he now has for lighting up such sections?

Mr. Horam: Yes. We have a national programme for the lighting of motorways, which we operate in conjunction with local authorities, and 235 miles of motorway have already been lit, 14 more miles are having lighting installed, and for 55 more miles lighting is in the design stage, so we are making progress.

Mr. Hardy: Will my hon. Friend note that Opposition Members are consistent in their demands for savage public expenditure cuts in general but prolific in their suggestions for expenditure of a wholesale variety for particular items? Will he bear in mind, when and if it is possible to extend motorway lighting, that the criterion should not be that the area is within the Home Counties, and that there are areas in Yorkshire and Humberside, and certainly in my constituency, that require attention?

Mr. Horam: Yes, I totally agree with my hon. Friend. He will have noted the regional bias in the Department of Transport that is rather in his direction. I know that there are a lot of lit miles on the M62, for example, and on other roads in Yorkshire.

Bus Services (Railway Line Closures)

Mr. Robin F. Cook: asked the Secretary of State for Transport what proportion of bus replacement services for rail passenger line closures since 1963 have remained in operation to date.

Mr. William Rodgers: Full information is not readily available, but I understand that some two-thirds of the bus services introduced for this purpose in the period 1969 to 1973 were still in operation in 1976, some of them in modified form.

Mr. Cook: As those figure show that, conversely, one-third were not still in existence, will my right hon. Friend explain how the assured bus replacement services referred to in the Green Paper will differ from the previous bus replacements, which clearly were not assured? Will he, in particular, insist that British Rail takes full account of the views of the Transport Users Consultative Committee before it persists in its own bizarre idea of turning some railways into busways?

Mr. Rodgers: I certainly agree that British Rail should consult widely about any proposals that it makes for changes, as it must also take account of the information, such as it is, about what has happened in the past. However, again, this is an area for thoughtful and informed discussion and an attempt to find out what makes the best success in the interests of the man or woman who wants a convenient form of public transport. I would not wish to forecast the outcome, but I hope that discussions will continue in that spirit.

Mr. Lee: Without wishing to detract from the point made by my hon. Friend the Member for Edinburgh, Central (Mr. Cook), may I ask my right hon. Friend to address himself more to the question of the closure of roads for economic purposes? He will be aware that he informed the House some time ago that, as far as he was aware, there had been no closures of roads for economic reasons, while we have had thousands of miles of railways closed during the last 25 years.

Mr. Rodgers: I hope that I have grasped the burden of what my hon. Friend asked. I think that the answer is that I shall give it my consideration.

National Freight Corporation (Company Purchases)

Lord James Douglas-Hamilton: asked the Secretary of State for Transport whether he will make a statement on his policy as regards the National Freight Corporation's purchase of overseas companies.

Mr. Grylls: asked the Secretary of State for Transport whether he will make a statement on his policy as regards the National Freight Corporation's purchase of overseas companies.

Mr. William Rodgers: I have nothing to add to what I told the House during the course of the debate on 20th January.

Lord James Douglas-Hamilton: Does the Minister agree that it is no part of the National Freight Corporation's remit to reform the road haulage organisation in France?

Mr. Rodgers: I certainly agree with that, but I do not think that the NFC should be restricted, as a public corporation, in exercising commercial judgments


of a kind that the private sector is free to exercise. This was a matter that we discussed fully on 20th January.

Mr. McNamara: When my right hon. Friend meets the chairman shortly, will he discuss with him the recent closure of the freightliner terminal in Hull and explain to him that Hull is an area with very high unemployment and very depressed conditions, which cannot be served from Leeds, and that it would be a good idea if, occasionally, the corporation stopped taking these premature decisions without looking at the implications for regional policy generally and for the hopes of an upturn in industry and transport facilties in those areas?

Mr. Rodgers: I do not think that the chairman would regard Hull as being overseas, which is the burden of the question.

Mr. McNamara: That is the way things look.

Mr. Rodgers: As my hon. Friend knows, the chairman is fully aware of the feelings aroused by the decision that has lately been taken. My hon. Friend and others of my hon. Friends have been assiduous in making their views known, and very properly.

Mr. Moate: Although it may be right for managers of nationalised industries to be free to take commercial decisions, how are they to be held accountable for commercial failures? What was the total loss incurred in the French operation?

Mr. Rodgers: It is believed that the cost—this was published in the NFC's annual report and accounts for 1975—was about £11·4 million. The accountability of the NFC, and all nationalised industries, is to this House, through the Secretary of State. It is right that we should discuss it. We have the ultimate power of decision about the major strategic decisions that are represented by the policies of this corporation and others.

London Transport Executive (Chairman)

Mr. Newens: asked the Secretary of State for Transport when he next expects to meet the Chairman of the London Transport Executive.

Mr. William Rodgers: Not in the immediate future.

Mr. Newens: When my right hon. Friend does meet the chairman, will he impress upon him the tremendous importance of the Epping-Ongar section of the Central Line for people of North Weald and the surrounding area? Will my right hon. Friend tell him of the tremendous sense of outrage that would be aroused among people of all sections of the community if, having established the case for keeping the line open only a year or two ago, the issue of closure were again to be raised?

Mr. Rodgers: I understand the strength of feeling about this matter. My hon. Friend has made a number of representations about it, and very properly, too. I think that the chairman is aware of the issues involved. As my hon. Friend says, some years ago a decision was made to keep the line open. There has been no recent change in that position.

Mr. McCrindle: As the closure of the Epping-Ongar line would adversely affect many villages in my constituency, as well as the town of Ongar, will the Secretary of State, the next time he meets the Chairman of the London Transport Executive, tell him that some of us are not persuaded by the arithmetic used by London Transport, as a result of which it alleges a loss that some of us suspect is far in excess of the actual loss?

Mr. Rodgers: I note what the hon. Gentleman says. No doubt he has made direct representations to the chairman. He will also appreciate that the chairman is directly responsible to the Greater London Council and not to me—though the hon. Gentleman's constituency is outside that area.

Mr. Strauss: I am sure that my right hon. Friend is well aware of the high esteem in which the present Chairman of the London Transport Executive is held by the whole House, particularly by all those on the Government side of the House who know him well. Is my right hon. Friend aware, however, of the concern that has been caused by the fact that the chairman of a body with such grave responsibilities and difficulties to face has taken on another very onerous job as Chairman of the Arts Council? When my right hon. Friend meets the


Chairman of the London Transport Executive, will he discuss that matter with him, so as to be able to reassure hon. Members and people outside the House that this does not mean any diversion of interest and time to duties in an almost equally important body?

Mr. Rodgers: I am sure that the whole House will endorse the kind remarks made by my right hon. Friend about Kenneth Robinson. The trust that the House has in him is an adequate assurance that he will not neglect his present duties because he has taken on further responsibilities. In so far as there are anxieties, I am sure that Mr. Robinson will be aware of them and for that very reason will do his best to ensure that they do not turn out to be justified.

IMMIGRATION (REGISTER OF DEPENDANTS)

The Secretary of State for the Home Department (Mr. Merlyn Rees): I will, Mr. Speaker, with permission, make a statement.
The report of the parliamentary group under Lord Franks set up by my predecessor
to examine the feasibility and usefulness of a register of dependants
has been laid before the House and is published today. I would like to express the thanks of the Government to Lord Franks, my right hon. Friend the Member for Dartford (Mr. Irving) and the hon. and learned Member for Runcorn (Mr. Carlisle).
On the central issue, the group says that
if the reader of this report had hoped to find a positive recommendation for or against a register he will be disappointed.
The group did not make recommendations. It has, however, reached a number of conclusions about a possible scheme but in doing so draws attention to the fact that it would be open to objections which would be matters for the Government and Parliament to take into account. It is inherent in the only scheme which the group thought feasible that a register would be discriminatory, would be incomplete in coverage, would involve long delay in implementation and would be very expensive; and it is clear that it could give no certainty about future

numbers. Although we shall listen carefully to the views of hon. Members on the report, the Government's view is that such a register would not be desirable, practicable or likely to serve the purposes which promoters of the idea intended for it.
The Government have been considering whether other steps can be taken to relieve current anxieties. These anxieties have to be seen against the background of the society to which we are dedicated. This is a society based on racial equality and harmony in which all with a right to live here are treated fairly. This can be assisted by firm action to check abuses of the present system.
New Immigration Rules will shortly be made to deal with marriages of convenience aimed solely at achieving entry or avoiding removal. The taking of employment contrary to conditions imposed on entry—which is by no means confined to people from the New Commonwealth and Pakistan—has been of concern not only to the Government but to the TUC and is currently under discussion in the EEC. Methods of ensuring that all applicants for employment are entitled to take it will be discussed with both sides of industry. I am also investigating the extent of overstaying by people admitted for temporary purposes. Action in these areas should do a lot to put an end to abuses of the existing system. On all these matters, the Government will give further information to the House in the near future.
I am also considering the question of reform of our nationality law, which, as the Franks Report points out, has a bearing on our immigration policy. I shall make a further statement on this also in due course.

Mr. Whitelaw: Is the right hon. Gentleman aware that we on this side of the House would wish to be associated with the thanks to Lord Franks, the right hon. Member for Dartford (Mr. Irving) and my hon. and learned Friend the Member for Runcorn (Mr. Carlisle) for the enormous time and trouble that they put into the compilation of what I believe will be seen to be a comprehensive report? Obviously hon. Members will wish to study the report in detail before coming to final conclusions, and I ask the Home Secretary to press his right hon. Friend


the Leader of the House for a debate in Government time so that the House may give its considered view.
On the basis of the right hon. Gentleman's statement, I should like to ask three questions. First, is he aware that, even if the House eventually accepts the Government's conclusion about the impracticability of a register for dependants, a comprehensive report of this nature into the complex issue of immigration control is bound to be of considerable value in making the necessary decisions on future immigration policy?
Secondly, does the right hon. Gentleman appreciate that he will have widespread support in the House, and, I believe, in the country, when he accepts that in the interests of race relations steps must be taken to relieve current anxieties about the scale of immigration? On that basis, as a start we welcome his determination to check abuses of marriages of convenience and overstaying and hope that he will bring his detailed proposals to the House as soon as possible.
Thirdly, does the right hon. Gentleman realise that such limited measures do not go to the heart of the problem and so will not allay the basic fears about the present scale of immigration and the uncertainty over future immigration trends that will continue to pose a substantial threat to tolerance and understanding in our community?

Mr. Rees: I think that the right hon. Gentleman is right. I have had some time to study the report, and it matters that right hon. and hon. Members should have time to study it. It is an important and valuable report. I repeat what I said on that. Whether the debate is in Government time or in Opposition time is not a matter for me, but at the right moment I should welcome a debate on these matters.
The right hon. Gentleman picked up the point about abuses. I have found—some years ago I had responsibility for this as a junior Minister—that when steps are taken to stop abuses such action is welcomed in all parts of the country, not least in the immigrant community because it does great harm to them for people to think that abuses are the norm.
I have studied the figures, but it is not possible now to go into detail. I refer to the figures on page 7 of the Franks Report, where one sees details of those admitted on arrival and those removed at the expiration of the time limit. Two sets of figures are in decline. One is for United Kingdom passport holders. The problem has been with us for 10 years, and the decline is now to be seen. The other figure showing a decline is for those exempt from deportation under Section 7 of the Immigration Act 1971.
It is easy, in talking about numbers, to give the impression that all is wrong. It is not possible to have certainty on these matters. What people require is a belief that all is not wrong and that millions of people are not coming to this country. Those who give a contrary impression are doing great harm to good race relations.

Mr. Hooson: May I, on behalf of my party, associate myself with the thanks expressed by the right hon. Gentleman to the Franks Committee and the great industry of its members in preparing this report? I welcome the Government's acceptance of the view that a register is likely to prove not only ineffective and expensive but offensive because it would be discriminatory.
Is not the key to this matter a reform of the nationality laws? Surely the Government have had ample time in which to consider this matter. When does the right hon. Gentleman intend to make a further statement on this important subject?

Mr. Rees: I am grateful to the hon. and learned Gentleman for what he said at the beginning of his question.
It is generally known that when I took office I inherited a report in the Department on the question of nationality, and I have studied that carefully. Even if there were available all the parliamentary time that would be needed, which there is not, it would not be an easy matter to tackle. I do not know whether the hon. and learned Gentleman thinks it is a simple matter to transfer citizenship in different parts of the world. What I propose to do is to publish a discussion paper at the appropriate time. On nearly every page of the report that I inherited I have found what I might describe as a minefield that would cause the gravest


problems, and any legislation on the matter would make the devolution Bill look like a one-clause measure.

Mr. Prentice: The discussion on this matter centres on the need to avoid abuses. Does my right hon. Friend agree that one of the most unsatisfactory aspects of the present situation is the long time that genuine dependants have to undergo before they can get a substantive interview at a high commission or embassy based in the sub-continent? Will the Home Secretary discuss this matter with the Secretary of State for Foreign and Commonwealth Affairs to see whether practical steps can be taken to reduce the delays?

Mr. Rees: As a result of the activities of Ministers in the Department prior to my arrival the procedures have been speeded up. My hon. Friend the Under-Secretary has recently been to the Asian sub-continent on my behalf. The problem of dealing with documentation in an area where registration is not the norm is extremely difficult. The men and women who work at the entry stations in the Asian sub-continent and in all other parts of the world have a difficult job. However, we do our utmost to be humane and helpful to people who are often worried and concerned about their future.

Mr. Powell: Has the right hon. Gentleman noted that the proportion of the population in the year 2000 which this report estimates will be of New Commonwealth origin exceeds the "little over 6½ per cent." which I forecast in 1968? Does he realise that an overall percentage in the United Kingdom of 7 per cent. means that there will be 20, 30 and 40 per cent. in the cities and areas primarily affected?

Hon. Members: So what?

Mr. Rees: On the question of estimates of the population, in which the right hon. Gentleman has taken a great interest—

Mr. Fell: He is right.

Mr. Rees: It is one thing to be right in logic in the classics but on the future of the population one can be wrong. I would ask the right hon. Gentleman to look at all the research on the future of the population of this country which was published just after the war, and which

was inflicted on me as a university student when the war was over. Its one main feature was the thing that I now know—it was wrong. What happens is that net reproduction rates change, that people's attitudes change in a new environment. I beg the right hon. Gentleman to realise that long after our time it will be found that people will be looking at a situation completely different from the one that he envisages. I therefore reject his attitude to this matter.
Whenever the right hon. Gentleman makes a speech in this way, I receive in my postbag abusive letters which link not only black and brown people in this country but the Irish as well. The right hon. Gentleman's attitude is all-pervading and pleases only those who are unsure of themselves. I do not believe that the right hon. Gentleman is unsure of himself. I think that he is trying to make sure of what might happen politically, but he will be proved wrong.

Mr. Joseph Dean: Since my right hon. Friend's statement relates to the right of certain people to enter this country, and since it has appeared on the tape that the over-publicised film director, Mr Thorsen, arrived in this country this morning, has my right hon. Friend any information to give concerning whether any action is being taken about Mr. Thorsen's entry?

Mr. Rees: Mr. Thorsen arrived at Heathrow this morning and informed the immigration officer that he intended to pay a short visit to the United Kingdom and then go to Paris. He said that he was here to promote the showing of a film called "The Dreams of Thirteen". He had with him a copy of the script of his proposed film about the life of Christ but denied that he was coming here in connection with that project. After questioning, the immigration officer exercised his powers to refuse Mr. Thorsen leave to enter, on the ground that his exclusion was conducive to the public good. Mr. Thorsen was informed of his right of appeal, which is exercisable from abroad.

Mr. Stanbrook: Getting back to the subject of the Home Secretary's statement, is not the conclusion of the report that a register would not be feasible ample confirmation of the belief of many


people, which is also expressed in some official quarters, that the pool of dependants is infinite? In this situation, is it not the right hon. Gentleman's duty on behalf of all the people now resident in this country to suspend immigration of this category and to impose strict quotas?

Mr. Rees: The hon. Gentleman talks about immigration from the West Indies and from the Asian sub-continent to this country. A change has been taking place not only because people have been coming here quite freely from the EEC but also because people are coming here who are taking the place of the prime movers, who come here on work permits. Something is happening. If the hon. Gentleman is saying that all those who come here to work and to settle from the EEC or from Southern Europe and other parts of the world should be stopped, he is quite wrong. If he is saying that one should pick out only those from Asia and the West Indies, he is being discriminatory and I am not prepared to do what he says.

Mr. Stanbrook: On a point of order, Mr. Speaker. Is it in order for the Home Secretary to reply to a question that he has not even heard?

Mr. Speaker: That has been done many times in this place.

Several Hon. Members: rose—

Mr. Speaker: Order. May I explain to the House the difficulty in which I find myself? This is a Supply Day, on which there are two Adjournment debates in which many hon. Members are interested. In addition, there is to be another major statement. In addition to that, I am to hear an application under Standing Order No. 9, and an hon. Member seeks leave to introduce a Bill under the Ten Minute Rule. In view of that, important though this subject is, but realising from what the Home Secretary has said that it is bound to come up again, I propose to allow just two more questions from either side.

Mr. Alexander W. Lyon: While I welcome my right hon. Friend's decision about the register and any sensible proposals to cut down evasion of control, may I ask whether he will confirm that, in the present influx of New Common

wealth immigrants and those from Pakistan there are three elements—first, the United Kingdom passport holders from East Africa, where the commitment is nearly finished; second, the wives and children under the age of 18, for whom the commitment will be finished within the next few years, and where there are already signs that it is tailing off in India and Pakistan; third, the fiancées, on which subject the country simply has to make up its mind that any civilised State allows its children to marry outside the country and to bring their spouses back home?

Mr. Rees: On my hon. Friend's earlier remark about the major aspect, I am grateful for his support. I have been checking the figures and there is no doubt, as my hon. Friend says, that the pool of dependants—wives and children—of those who were here on 1st January 1973 has declined, in terms of the argument that he has consistently put forward. However, we need also to consider what will be the pattern for the future. In terms of what my hon. Friend has already told me in discussions that we have had on this matter, there is no doubt that in the India part of the Indian subcontinent, the applications for dependants are declining. That is not true in Bangladesh. As for fiancées, a change is taking place, although in my view it will be long-term, in the attitudes of Indian girls here towards being treated in a way which is appropriate in the light of the social environment on the sub-continent but is foreign to the environment of this country.

Mr. Eyre: Is the right hon. Gentleman aware that more than 60,000 immigrants a year now enter this country, settling in 14 main reception areas in the rundown inner areas of cities such as Birmingham, Leicester, Bradford and Bolton, and that there are serious problems there relating to health, education and housing—all made much worse by the recent cuts in resources as well as by the drastic rise in unemployment? In these circumstances, does the right hon. Gentleman realise that it is completely unfair to all the families now living in those crowded areas to continue this process of deterioration? Will he therefore undertake drastically to review his immigration policy, because the measures that


he has announced today are not enough to meet this situation?

Mr. Rees: The hon. Gentleman is concerned about the inner city areas—and so am I, because I represent part of an inner city. However, our problems do not arise merely because people move in from the new Commonwealth. When I first began to represent an inner city area a long time ago, we had problems then. I ask the hon. Gentleman to examine the figures on page 7 of the document. In terms of totals, as I tried to point out earlier, the number of United Kingdom passport holders, who tend not to go to inner city areas, is in decline, as are the 7,000 exempt from deportation. When the hon. Gentleman mentions those who arrive in this country, I would inform him that a third of that figure relates to those who come to this country in relation to whom the time limit originally imposed has been removed.
The way in which the hon. Gentleman expressed his remarks betrays a misunderstanding of the figures. That is not surprising, because he cannot have had long to examine them.

Mr. Bidwell: Does my right hon. Friend not agree that throughout the years of debate on these matters hon. Members in all Darts of the House have been committed to the principles of family unity, although not in a vacuum, because that is how the British people would like our society to be arranged? However, is not the picture incomplete unless my right hon. Friend draws attention to the fact that, under the present Act passed by a Conservative Government and its attendant rules, there are untold millions of patrials throughout the world? Do not those patrials have an absolute right to come to this country should they so decide, and are they not mostly white? Should we not address our minds more vigorously to what is taking place in Rhodesia with a view to possible resettlement of refugees? If the right hon. Wolverhampton wanderer, the Member for Down, South (Mr. Powell), would address his mind to providing a solution to these problems and get away from fantasies of the prospect of a civil war in this country, he would make a much greater contribution to human thought.

Mr. Rees: On the subject of family unity, I have already told the House that we must deal with marriages of convenience. There is no doubt that what goes on in that regard casts a doubt on what is perfectly proper, and that is the arranged marriages that are normal in Asian communities.

Mr. Dudley Smith: To return to the original statement in which the right hon. Gentleman referred to his anxieties, does he not accept that there are very real anxieties in high immigration areas? Does he not also accept that this is not just a matter of racial discrimination, because the situation is being improved slowly but surely? The problem relates to the subject of numbers. The feeling among the vast majority of people is that the numbers are still much too high. Will he not accept what was said by my right hon. Friend the Member for Penrith and The Border (Mr. Whitelaw), that the position needs to be given much more robust attention from the Government, and will the Government provide time for a debate because we must get these numbers clear?

Mr. Rees: If the hon. Gentleman will examine the statement, he will see that when I spoke of abuses I also mentioned an investigation that is taking place into cases involving overstaying in this country. I wish to quantify those cases of overstaying by visitors because I believe that that and those who come here for other reasons may prove to be a major factor which is worrying people. I want to remove those anxieties because they are causing a great deal of trouble.

OIL COMPANIES (CONTINENTAL SHELF)

The Secretary of State for Energy (Mr. Anthony Wedgwood Benn): With permission, Mr. Speaker, I wish to make a statement about the fifth round of licences in the United Kingdom Continental Shelf.
The number of applications we received for licences in the fifth round shows how great an interest the world's oil companies are still taking in the United Kingdom Continental Shelf.
In the several months of our appraisal of the applicants, that high level of interest was shown in a number of ways. First, each applicant company or group of companies impressed upon us the potential it saw in the blocks for which it had applied. Secondly, the offshore oil companies, through the United Kingdom Offshore Operators Association, have thrown themselves with vigour into the working out of a pro-forma agreement. This will be the basis of the relationship between British National Oil Corporation, which will have a 51 per cent. share in the fifth round licences, and its co-licensees.
Thirdly, good will on the part of the companies and the recognition of the justice of the Government's policy on State participation in fields under existing licences have enabled virtually all of the companies concerned in commercial fields to come to an understanding with us in this context. That factor, along with all the other published criteria for the appraisal of fifth round applications, has been taken into account in working out the allocation of the new licences, which is now complete.
I can accordingly now tell the House the outcome of my study of the licence applications which my Department received in October. As I told the House on 27th July and announced on 20th August 1976, I shall be making offers of licences subject to two conditions: the agreement between us and the potential licensees, including BNOC, of a compulsory exploration programme for the blocks to be licensed; and the conclusion by each group of co-licensees, with my approval, of an operating agreement based on the pro-forma text which I mentioned earlier.
The first of these conditions has been a regular feature of United Kingdom rounds of offshore licensing. The second is new, because it is needed to define in a way acceptable to the oil companies and to the Government the working relationship between the majority partner, BNOC, and the other licensees. Both of these are important matters: the first because it will spell out precisely the the blocks licensed; the second because it will determine the way in which the programmes of exploration drilling for

nation's interests are taken into account in our future offshore oil programme.
The list of the applicants to whom these conditional offers are being made and the blocks or part-blocks offered to each will, with permission, be circulated in the Official Report. Each applicant is being asked to reply to the offer within two weeks. After that, there will be a period of some months during which the two agreements will be worked out for each successful applicant or applicant group. The actual awards of individual licences will take place as and when the individual negotiations are completed. If, as I expect, all the offers we now make are in practice taken up, we shall be issuing licences for 44 out of the 71 blocks and part-blocks which we listed in the invitation to apply. The take-up rate is close to the highest obtained in earlier rounds of United Kingdom offshore licensing, and about the same as in last year's United States offshore oil round. Two applicant groups applied for specified blocks and in addition offered to consider other blocks, yet to be specified, from within those offered in the fifth round. I shall be pursuing this offer further with them.
Hon. Members will see from the list that the major international oil companies are well represented. But there are also oil companies, both European and North American, which are among the independents. There are a few, but not many, companies which are new to United Kingdom offshore oil operations. The very severe demands which exploiting offshore oil makes upon the technical, managerial and financial resources of companies mean that particularly high standards have to be demonstrated in all these respects by anybody who is to be entrusted with the task of exploring for and developing British oil.
Among the operators for the blocks and part-blocks for which licences are being offered will be BNOC. By agreement in each case with its co-licensees, BNOC is to be the operator in four blocks. This will help BNOC to develop its existing capability as an operator, currently working in exploration and on the Thistle field, and hence continue to extend its ability to help maximise the benefits to the United Kingdom from exploitation of our oil and gas resources.

Mr. Tom King: Is the right hon. Gentleman aware that we welcome his further routine announcemen of another round of licences for the North Sea? We hope that success will attend those applications in the interests of the country as a whole.
However, we cannot extend congratulations to the Secretary of State on the delay in producing this much-heralded but much-delayed statement. Will he confirm that the delay will mean that the whole of this year will now be lost in developing these blocks? Furthermore, will he give an estimate as to the loss in potential employment in the offshore oil industry following the delay?
Does he not appreciate that we find somewhat nauseating the smug conceit in his claim that the companies recognise the justice of Government policy expressed in part of the statement—a claim which, from my personal experience, I have not found to be shared by one oil company?
Would the right hon. Gentleman confirm that to make a success of this round of applications a major change of Government policy took place in the middle of them involving the agreement that BNOC would pay the full commitment of its participation costs? In connection with that, and the recognition that BNOC is now a full risk partner in the exploration project, would he give the House an estimate of the cost involved? Would he tell the House whether he anticipates that that will take BNOC outside its financial limits under the Petroleum and Submarine Pipe-lines Act? Does that not underline the recent comment by Lord Kearton that when he told the Treasury the figures involved, the Treasury was aghast at the figures?

Mr. Benn: If this is a routine statement, I wish that we had heard it when the previous Government licensed North Sea oil. It has taken three years of hard effort to undo the damage done by the hon. Gentleman's Government in disposing of oil under the licensing round for which they were responsible without any guarantee that the United Kingdom would benefit, as it now will benefit from our policy.
I do not accept that there has been delay in this. The difference this time is that 51 per cent. of the holding of all the licences issued, which I have announced,

will be a BNOC holding. With the petroleum revenue tax, which we introduced and not the previous Government; with the capacity to have a royalty from oil, which we introduced; with the Petroleum and Submarine Pipe-lines Act, which we introduced; and with the arrangements I have announced today, 85 per cent. of the revenue from the licensing will accrue to the United Kingdom. That is a substantial change in policy and I make no apology to the hon. Gentleman for taking a little time to make it possible.

Mr. Grimond: Has the Secretary of State made any estimate of the date when work will start? Has he made any estimate of the consequent demand which there may be for such things as drilling rigs and shore facilities during the exploratory period?

Mr. Benn: The drilling season begins in spring. It is our intention that the agreements I mentioned will be completed soon and that we shall catch the 1977 drilling season. This will bring potential work in terms of jobs and investment to the United Kingdom, and it will be much easier for the general British interest in these matters to be observed due to the rôle which the BNOC will have. I should be happy to pursue that matter in greater detail if the right hon. Gentleman would like me to do so.

Mr. Robert Hughes: Whilst congratulating my right hon. Friend on his statement, I must ask him whether the pro-forma agreement he has mentioned will give the Government full rights of access to information about reserves of oil and gas? Is there a fair competition clause for United Kingdom suppliers of equipment? Is there a fair access clause for the rights of trade union organisation on the rigs?

Mr. Benn: Some time ago we agreed a full and fair opportunity provision which will apply in the case of a new round. The Minister of State and I have been involved in discussions with oil companies and trade unions about trade union rights offshore. This was raised in Aberdeen when I visited my hon. Friend's constituency 18 months ago.
I have repeated many times in the House that there should be access to information, so that the United Kingdom Government are in a position to watch


the development of these resources not only from an exploration point of view but in the general conduct of the trade and refinery business. This has taken some time and the House must recognise that it was not provided for under the previous round.

Mr. Skeet: Will the Secretary of State stop prevaricating and answer the question put by my hon. Friend the Member for Bridgwater (Mr. King)? What is the capital investment of the BNOC under the fifth round of licensing, bearing in mind that it is taking a 51 per cent. interest in all the licences? What are the conditions attached to the sale of oil under the operating agreements?

Mr. Benn: The answer to the first question is very simple. The cost of borrowing for developing North Sea oil will be exactly and precisely the same for BNOC as for other oil companies which would have to borrow money and for British Petroleum—

Mr. Skeet: Tell us the figure.

Mr. Benn: The hon. Gentleman must recognise that the amounts of capital involved in developing the North Sea depends on whether wells that are drilled are capable of development. The BNOC will be in exactly the same position in raising funds as will BP or any other oil company. That is the gain.
The participation arrangements have been published. We published the BP agreement and the Shell-Esso memorandum of understanding. These provide that the Government have access to information and have the appropriate influence in the development of oil company policy.

Mr. Skeet: On a point of order, Mr. Speaker. The Secretary of State is not answering the question. Surely we are entitled to an answer bearing in mind the interest of the right hon. Gentleman in open government.

Mr. Speaker: Order. The hon. Gentleman has had his intervention in the debate. Every speaker is in favour of open government when he sees it.

Mr. Madden: Would the Secretary of State agree that the Government's policy

on oil has done nothing to deter or lessen oil exploration activity, contrary to the howls so often heard from the Opposition Benches? Would he also agree that requests made from the Labour Benches for tax revenues to be increased over the present levels are underlined by the announcement he has made this afternoon? What proportion of licences has been awarded to British companies?

Mr. Bean: I agree that our policy has not deterred companies from continuing their development of the North Sea. The provision of the petroleum revenue tax, plus the royalty, plus the fact that BNOC will be a genuine 51 per cent. equity holder provides the 85 per cent. figure which I have given. [HoN. MEMBERS: "Genuine?"] It is genuine in the sense that it puts up 51 per cent. of the money—

Mr. Skeet: How much?

Mr. Benn: —and gets 51 per cent. of the return.
I will answer the hon. Gentleman about the cost. If I could tell him how much oil there was in the blocks which I have licensed today I could, with the help of experts, give him sonic estimate. Since neither he nor I know how much oil there is in the blocks I have licensed, it is impossible to guess what the cost of development of the field would be.
Open government does not give me an insight, alas, into the resources of the the North Sea. I shall give my hon. Friend the Member for Sowerby (Mr. Madden) the percentages. They are quite complicated to work out.

Several Hon. Members: rose—

Mr. Speaker: I shall call two more hon. Members from either side.

Mr. Gordon Wilson: Is the Secretary of State aware that his reputation of being an English nationalist will be enhanced by his statement that 90 per cent. of the 85 per cent. return which he expects from the new blocks will go into the Treasury and into the hands of London? Is it not a gross betrayal of the interests of Scottish workers that in the statement there is no reference to the Memorandum of Understanding in relation to the purchase of goods? Will he say whether detailed discussions on the


individual licences will incorporate, in the agreements, a clear understanding that purchases of equipment should be made from Scottish sources and that Scottish nationals and citizens should be hired wherever possible?

Mr. Benn: I answered that point in reply to a supplementary question. I am sorry if I did not put it in my initial statement, but it was rather a long statement. We have negotiated a full and fair opportunity provision which is part and parcel of our oil policy. If the hon. Gentleman is suggesting that I, as a Minister, should be steering work away from factories in England to Scotland—

Mr. Gordon Wilson: Yes. It is Scottish oil.

Mr. Benn: —perhaps he would make that explicit. Candidly I do not think it right for United Kingdom Ministers to do things that would hinder the opportunities of, say, platform builders in the North-East to go to Scotland. I am under international obligations to provide full and fair opportunity and no more. The majority of the jobs have accrued in Scotland and I very much welcome that. I ask the hon. Gentleman to reflect whether the Scottish interest has not been better served by a determined United Kingdom oil policy pursued over a long period with the oil companies. I believe that to be the case.
I can now give my hon. Friend the Member for Sowerby the answer to his earlier question. The United Kingdom public sector share of the North Sea licences I have announced today amounts to 56 per cent. The private sector United Kingdom share totals 18 per cent., making the United Kingdom share of the licences I have announced 74 per cent. The rest are divided between others.

Mr. Canavan: In view of our grave unemployment problem, may I ask my hon. Friend whether he will demand that the applicant oil companies give specific commitments to provide jobs, especially in areas of high unemployment? Furthermore, is he aware that many of us, and probably most Scots, would rather have an English Socialist such as my right hon. Friend than a Scottish Fascist or a Scottish nationalist?

Mr. Benn: That latter requirement is, unfortunately, not provided in the licences I have awarded. I will consider it for the sixth round in case it would be helpful.
My hon. Friend is on a serious point about jobs. The Government of any oil-producing country—and this is certainly the case with the British Government—should be determined to see that resources are developed, not only so that the oil may be sold but so that those resources help contribute to the re-industrialisation of the country. That is why the revenues matter.
My right hon. Friend the Minister of State has played a most notable part in going round the oil companies continually pressing the claims of orders for United Kingdom yards and factories. Of course BNOC, as a 51 per cent. holder, will be in a much stronger position to see that these factors are not overlooked. The order that has gone to Marathon is an example of what might be achieved.

Mr. Tom King: Since Lord Kearton was able to give an estimate to the Treasury—which caused that sense of shock that has been expressed in the newspapers—why is the right hon. Gentleman unable to be equally frank and give us an estimate about the likely costs involved?

Mr. Benn: The hon. Gentleman must reflect on the answer I have given him. I do not know how much oil is in the blocks I have announced.

Mr. Skeet: Exploration.

Mr. Benn: It was announced from the beginning that BNOC would pay 50 per cent. of the exploration costs. The change that occurred was in relation to development costs. That is where substantial expenditure may be incurred. The exploration costs are small relative to the development costs. The oil companies were pleased that the BNOC participation would be on a full equity basis. The returns from this will accrue to the Government in the form I have described.

Mr. Speaker: Standing Order No. 9 application—

Mr. Skinner: On a point of order, Mr. Speaker. You did say that you would call two hon. Members from either side.

Mr. Speaker: I am sorry. Mr. Skinner.

Mr. Skinner: Has my right hon. Friend pursued the logic of his statement inasmuch as he refers to this current deal as being a "genuine" deal? Can we assume that the previous deals, which allowed BNOC the ability to purchase as distinct from the ability to own, were not genuine? If this is so, and if, after a year's delay, my right hon. Friend has been able to use his muscle to get a genuine deal, does it not follow that the sensible thing to do is to use that muscle—having got the latest round in his pocket—to ensure that we get a genuine deal with the past licences? Does he agree that in that way we shall get more Scottish and English jobs—and fewer American jobs?

Mr. Benn: The relationship between jobs and the role of the BNOC is not as direct as my hon. Friend makes it seem. What I said originally was that there was a genuine 51 per cent. equity holding. We inherited licences signed by the previous Government under which there was no guarantee that a drop of the oil found in the North Sea would be available to the United Kingdom.

Mr. Skeet: That is in the licences.

Mr. Hannam: What the right hon. Gentleman says is not true.

Mr. Benn: There was no legislative régime, no petroleum revenue tax and no guarantee whatsoever—[Interruption.] The agitation on the Conservative Benches is meant to conceal the total failure of the Conservative Government to safeguard our position. To return to my hon. Friend's point, I had to go—it was all that was open to me—for a right to acquire 51 per cent. of the oil at market prices. When we did the fifth round we were in a position for the first time to implement our commitment that there should be a 51 per cent. ownership of the resources. To that extent it is a genuine 51 per cent. equity position. The rest is a matter of recovering what I could, on what basis I could, from the previous Government's policy.

Mr. Speaker: Standing Order No. 9 application—

Mr. Rost: On a point of order, Mr. Speaker. I did hear you say that you

would call two more Back Benchers from each side.

Mr. Speaker: I am sorry. What I said was that I would call two more hon. Members from either side and I was caught out because I did not anticipate that an Opposition Front Bench spokesman would get in again. I try hard to work on the principle of never making a promise unless I can fulfil it. My promise was two on either side. I have kept it.

Mr. Rost: Further to that point of order, Mr. Speaker. Would you care to reconsider your decision? In the light of the deliberately misleading replies we have had from the Minister we ought to have the opportunity to question him further.

Mr. Speaker: I realise the hon.Gentleman's deep interest in this subject, as I recognise the interest of the hon. Member for Exeter (Mr. Hannam). I wish that I had been able to call other hon. Members, but I must be fair to others who are interested in later proceedings.

Following is the information:

FIFTH ROUND: CONDITIONAL OFFER OF LICENCES

Applicant and Block or Blocks offered

BNOC

Conoco Limited.
Gulf (UK) Offshore Investments Ltd., 20/3.

BNOC

Total Oil Marine Limited.
Elf Oil Exploration &amp; Production (UK).
Aquitaine Oil (UK) Ltd.
Pict Petroleum Ltd., 3/14b.

BNOC

Monsanto Ltd.
Pacific Petroleums (UK) Ltd.
Gao England Ltd., 13/18.

BNOC

Chevron Petroleum Company Ltd.
Imperial Chemical Industries Ltd.
Murphy Petroleum Ltd.
Ocean Exploration Co., Ltd.
Hispanica De Petroleos SA 14/13.

BNOC

Canadian Industrial Gas (UK) Ltd.
Charter Consolidated (UK Offshore Oil Explorations) Ltd.
Charterhouse Petroleum Development Ltd.
Home Oil Company Ltd.
Tricentrol North Sea Ltd., 14/16, 14/17.

BNOC

British Gas Corporation.
Amerada Exploration Ltd.
Texas Eastern (UK) Ltd., 3/9b
British Gas Corporation, 98/22.


Hydrocarbons Great Britain Ltd., 107/16, 107/21, 110/9.

BNOC

General Crude Oil (UK) Ltd.
Newmont Oil Company International (UK) Ltd.
Dapdin Ltd., 13/20.

BNOC

Occidental Petroleum (UK) Ltd.
Getty Oil International (England) Ltd.
Allied Chemical (Great Britain) Ltd.
Thomson Scottish Petroleum Ltd., 14/18

BNOC

Phillips Petroleum Exploration UK Ltd.
Fina Exploration Ltd.
Agip (UK) Ltd.
Century Power and Light Ltd.
Halkyn District United Mines Ltd.
Oil Exploration Ltd., 20/9.

BNOC

British Sun Oil Co. Ltd.
North Sea Exploitation &amp; Research Co. Ltd.
Clyde Petroleum Ltd.
Hautpas Ltd.
Hampton Gold Mining Areas Ltd.
North Sea Global Energy Ltd., 20/7.

BNOC

Zapex (Scotland) Ltd.
Carless Exploration Ltd.
Gas &amp; Oil Acreage Ltd.
P &amp; O Petroleum Ltd.
Santop Ltd., 13/13.

BNOC

Mobil North Sea Ltd., 13/19.

BNOC

Kerr-McGee Oil (UK) Ltd.
Bow Valley Exploration (UK) Ltd.
Shenandoah Oil Corporation (UK) Ltd., 13/14.

BNOC

Texaco North Sea UK Ltd., 14/11, 23/26b, 106/15, 106/20.

BNOC

Conoco Ltd., 98/23.

BNOC

Arpet Petroleum Ltd., 106/29.

BNOC

Unionoil Exploration &amp; Production (UK) Ltd.
Skelly Oil Exploration (UK) Ltd.
Deminex Oil &amp; Gas (UK) Ltd., 14/12.

BNOC

Shell UK Ltd.
Esso Petroleum Company Ltd., 13/15, 13/27, 30/17b.

BNOC

Shell UK Ltd., 87/10.

BNOC

BP Petroleum Development Ltd.
Total Oil Marine Ltd.
Elf Oil Exploration &amp; Production (UK) Ltd.
Aquitaine Oil (UK) Ltd., 86/13, 87/12.

BNOC

BP Petroleum Development Ltd., 3/10b, 3/24b, 9/9b, 9/15b, 87/6A, 87/7A, 87/9, 132/10, 133/6, 132/15, 133/11.

BNOC

Hamilton Brothers Oil Company (Great Britain) Ltd.
Hamilton Brothers Petroleum (UK) Ltd.
Hamilton Brothers Exploration (UK) Ltd.
RTZ Oil and Gas Ltd.
Blackfriars Oil Co. Ltd.
The Trans-European Company Ltd., 9/10c, 9/14b.

EAST MIDLANDS ALLIED PRESS

Mr. Fry: I beg to ask leave to move the Adjournment of the House under Standing Order No. 9 for the purpose of discussing a specific and important matter that should have urgent consideration; namely,
the dispute between members of the National Union of Journalists at Kettering and the East Midlands Allied Press.
I am well aware of the pressure of time today and will be as brief as I can in explaining why what appears, initially, to be a purely local dispute has grave national significance. I will deal briefly with the background. This dispute has now gone on for over 11 weeks. It is an official strike. During that time a very much abbreviated version of the newspaper has been printed on five days a week with the editor being solely responsible for the journalistic content.
Despite various efforts on the part of the ACAS and other bodies, four separate attempts to settle the dispute have failed, largely due to the fact that the local members of the NUJ have apparently been unwilling to make any settlement or agreement to which they would have been bound by arbitration. One of the reasons for this is bound up with the influence of the chairman of the local branch, Mr. Reinecke. I commend those who have the interests of industrial peace in this country at heart—

Mr. Skinner: On a point of order, Mr. Speaker. Earlier, you referred to the fact that you were anxious about the time and spoke of the necessity to get on to other business. It occurs to me that you could get rid of this application quickly. As you know, if you did care to listen to the submission and subsequently granted it, it would be necessary for 40 hon. Members to stand in their places in assent.


There are many fewer than 40 hon. Members present in the Chamber, so you might as well call the whole thing off now.

Mr. Speaker: The hon. Member for Bolsover (Mr. Skinner) has something in his argument, but he does not know, before the hon. Member for Wellingborough (Mr. Fry) sits down—which I know will not be long—how many other hon. Members will come into the Chamber.

Mr. Fry: As I was saying, Mr. Speaker, the activities of the gentleman who is chairman of this branch deserves some investigation, particularly his background and his intentions. There is no doubt that he is the major cause of the present dispute.

Mr. Speaker: Order. May I invite the hon. Gentleman not to argue his case as though we were having a debate but to outline why we should have it?

Mr. Fry: The point is that this chairman has reported the editor of the newspaper to his local branch of the NUJ and today—herein lies the immediacy—the editor has been called to what many of us would describe as a kangaroo court of people who are on strike who are being asked to judge the actions of the editor, who is accused of exceeding his responsibilities.
I submit that the editor is only fulfilling his proper function—that is, producing

a newspaper—and that this situation brings into doubt the assurances we had in the House during the debates on the closed shop and the freedom of the Press, particularly those assurances given by the Leader of the House, who was then Secretary of State for Employment.
I submit that if the action against my constituent, the editor of this local newspaper, succeeds, no newspaper editor in the country will be safe from this kind of victimisation. I believe that the assurances we were given are shown to be absolute nonsense, and that it is therefore high time that the question of the closed shop in respect to journalism, the question of the editor's responsibility, and the freedom of the editor were discussed again.

Mr. Speaker: The hon. Gentleman asks leave to move the Adjournment of the House under Standing Order No. 9 for the purpose of discussing a specific end important matter that he thinks should have urgent consideration; namely,
The dispute between members of the National Union of Journalists at Kettering and the East Midlands Allied Press.
The hon. Gentleman did me the courtesy of giving me notice this morning that he would raise this matter. I have listened carefully to his argument, but I cannot give it precedence over the business of the day.

PARLIAMENTARY COMMISSIONER (AMENDMENT) (No. 2)

Mr. Speaker: In calling the hon. Member for Arundel (Mr. Marshall), may I say to him that no one will object if he takes less than 10 minutes?

4.23 p.m.

Mr. Michael Marshall: I appreciate that implied compliment, Mr. Speaker.
I beg to move,
That leave be given to bring in a Bill to amend the Parliamentary Commissioner Act 1967 with respect to the implementation of recommendations by the Parliamentary Commissioner; and for connected purposes.
The background to the Bill is in House of Commons Paper No. 496, the Fifth Report of the Parliamentary Commissioner for Administration, the Ombudsman, published on 24th June 1976. In paragraphs 15 and 16 on page 197 a case was reported in which the Ombudsman had recommended remission of taxation which had been incurred due to long delays by the Inland Revenue. The Ombudsman said:
The Department do not agree and I therefore report that there has been maladministration by the Inland Revenue in this case; that it has caused the complainants to suffer injustice; and that injustice has not been remedied.
This prompted me to make further inquiries to see how far the Ombudsman's recommendations have been met in full by other Government Departments.
From Written Answers to Questions on 24th January it appeared that in the 12 months ending 31st December 1976 the Home Office, for example, was the subject of 22 investigations in eight of which the Ombudsman found some element of maladministration. In none of these cases was a case still to be rectified. In other words, the Home Office had met the Ombudsman's findings. Equally, in the same 12 months, the Department of the Environment was the subject of 47 investigations, and in 12 cases an element of maladministration was found. Where rectification was possible, it was made.
In bringing forward this Bill I do not seek to cover a wide range. Most Government Departments are implementing the recommendations of the Ombudsman.

The largest number of cases involved stem from the Inland Revenue. For example, in 1971, out of 67 cases in which the Ombudsman found maladministration, 39 involved the Inland Revenue. In the past five years there have been eight cases in which the Inland Revenue has been charged, as it were, by the Ombudsman with injustice which has not been remedied and where taxpayers have suffered due to maladministration. It is with the question of remedy that I am particularly concerned in the Bill.
The Ombudsman has made a variety of recommendations in the eight cases. These have included tax rebates, suggestions for ex gratia payments, and so on. I want to pay tribute here to the work of the Select Committee on the Parliamentary Commissioner for Administration under the distinguished chairmanship of my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke), whom I am pleased to see in his place. Nothing of what I am seeking to bring before the House in any way implies criticism of the work of the Select Committee, because that Committee has given a great deal of attention to the problems arising from recommendations in respect of the Inland Revenue, and it is clear that some ex gratia payments have been made since June 1975. But there still remains the serious question of the handling of future cases.
I should also mention in passing that the cases are not confined to the Inland Revenue. In 1974–75 there was a case involving the Customs and Excise in which, once again, the injustice had not been rectified. I question whether it is fair to impose on the Select Committee the duty of going through the very difficult and detailed arguments and considering literally hundreds of cases before being able to exert influence. It is perhaps also inevitable that in this way there is delay.
The purpose of the Bill is simple. It would make a four-line amendment to the 1967 Act, ensuring that the Ombudsman's report when laid before Parliament would provide an opportunity for hon. Members to seek, by affirmative resolution, that the Ombudsman's recommendations were implemented by the Department concerned.
This would allow individual hon. Members the opportunity to ensure that cases which, after all, they are responsible for initiating, were followed through to their logical conclusion. It should in the circumstances I have described allow for debate in which the Department concerned—the Inland Revenue or whatever—could put its point of view. The use of the affirmative resolution procedure could, if necessary, ensure that the matter was rectified as I have outlined.
Above all, it would ensure that hon. Members would feel able to maintain the close personal involvement which springs from their own initiation of these cases, and in that sense I am glad to have three hon. Members opposite supporting me in the Bill.

Question put and agreed to.

Bill ordered to be brought in by Mr. Michael Marshall, Mr. Michael Alison, Mr. Charles Irving, Mr. Robert Rhodes James, Mr. Kevin McNamara, Mr. Hal Miller, Mr. Geoffrey Johnson Smith, Mr. Ivor Stanbrook and Mr. Edwin Wainwright.

PARLIAMENTARY COMMISSIONER (AMENDMENT) (NO. 2)

Mr. Michael Marshall accordingly presented a Bill to amend the Parliamentary Commissioner Act 1967 with respect to the implementation of recommendations by the Parliamentary Commissioner; and for connected purposes; And the same was read the First time; and ordered to be read a Second time upon Friday 18th February and to be printed. [Bill 63.]

Orders of the Day — SUPPLY

[6TH ALLOTTED DAY],—considered.

Orders of the Day — CHILD BENEFIT SCHEME

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Coleman.]

4.30 p.m.

Mr. Patrick Jenkin: It is over six months since the House last debated the Child Benefit Scheme. The House will remember the events following the Government's dramatic, and now universally deplored, decision to abandon the full scheme. Since then there has been a second change of direction. The evidence is now amassing that after those erratic changes the child benefit is now heading for the rocks. It therefore seems right that we should debate it. It gives me no pleasure at all to express these anxieties.
The tax credit principle on which a proper child benefit is based is seen by millions right across the political spectrum as being the most hopeful way out of the tangle of our tax and social security systems. It is the way to provide help for families in the greatest need without means-testing. It is a way to ease the frustrations of the poverty trap. It is the way to restore the incentive to work and to put paid to the nonsense of people being better off out of work. It is the way to put cash into the hands of mothers and to give a measure of independence to mothers. It is the way to lift millions of households out of dependence on supplementary and other means-tested benefits. If child benefit turns out to be a shambles, and if that undermines the credibility of the whole tax credit principle, the present Labour Government will bear a very heavy responsibility indeed.
I do not need to rehearse the whole history of the matter. It has been a classic tale of order, counter-order and disorder. The scheme has been radically changed not just once but twice in the space of a few months. We first had the Child Benefit Act, which envisaged a substantial tax-free cash benefit to


mothers combined with a corresponding reduction in the child tax allowance. In May the Cabinet abandoned that scheme and we had the proposal for a £1 family allowance for the first child subject to tax and clawback, bringing precisely 30p a week to each family with children.
In September the Government accepted—in the event it appeared unwisely—the joint TUC and Labour Party's curious hybrid proposal of a tax-free child benefit coupled with partial and differential reductions in child tax allowances. There was confusion after the first change in direction, but after the September decision the fat really was in the fire. It appeared that the publicity scheme went all awry. Originally we were to have one amending leaflet because 30 million copies of the original basic leaflet had already been printed before May. After the September change, however, we were to have a second correcting leaflet. As was made clear in reply to a Question from the hon. Member for Welwyn and Hatfield (Mrs. Hayman), the first leaflet would have to be withdrawn.
In November we had a long, detailed statement from the Chief Secretary—we are pleased to see the right hon. Gentleman with us today—spelling out some of the tax consequences of the September decision. In December we had the Inland Revenue leaflet P3(CB), which also showed evidence of the change in direction. Paragraph 7, concerning the notice of coding, stated:
The reference to 'Child benefit deductions' and 'Child benefit' on your notice of coding should be ignored.
In December we had another statement from the Chief Secretary giving the tax consequences for families with children overseas. It became apparent that they would be different from those for children resident here.
On 28th January we had another long and involved statement from the Minister for Social Security giving the details about the consequences for FIS and other means-tested benefits. It is now 9th February. The Child Benefit Scheme is starting in just eight weeks' time, and I believe it is true to say that hardly anyone really understands what is going to happen.

The Secretary of State for Social Services (Mr. David Ennals): Nonsense.

Mr. Jenkin: The right hon. Gentleman says "Nonsense". Let us perhaps try to find out. It is not for the want of leaflets. We have had some 32 million of the three main leaflets distributed. The trouble is they have all been saying something different.
The basic leaflet CH1(T) contained the original scheme and stated:
If you or your husband are getting an income tax allowance for a child under 11 it will end at the same time, and any tax allowance for a child aged 11 or over will be reduced.
Of course, that scheme was abandoned in May. We then had the May scheme, as a result of which CH1(T)A had to be produced. That said:
income tax child allowances will not be reduced or withdrawn in April 1977.
We then had the change of direction in September requiring another leaflet, CH1(T)B, which was printed in red. That leaflet stated:
Child tax allowances for children under 11 will not end in April 1977. Instead it is proposed to reduce child tax allowances by £104 for the first child and £130 for each other child. These reductions will be made whether or not you claim child benefit.
After September the intention was that the basic leaflet CH1(T) and the second correction slip CH1(T)B should be available to the public and that all 13 million copies of CH1(T)A should be withdrawn. It is hardly surprising that the Post Office was not able to cope.
My right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) and I sent to the Secretary of State and to the Chancellor of the Exchequer the results of a survey that we had carried out early in December. Taking 10 post offices entirely at random, only two out of the 10 had the correct combination of leaflets. One post office had no leaflets, one had the basic leaflet but no correction slips, one had the wrong correction slips, three had the leaflet with both correction slips and three had both correction slips and no leaflet.
The Secretary of State gave all sorts of excuses, such as that the second correction slip had only just been issued. He said that the Christmas rush was on and that all stocks of the first correction


slip had been destroyed but they had not been taken out of the display dispensers. The right hon. Gentleman also said in his letter of 28th January:
the Post Office are satisfied that by far the majority of the 24,000 Post Offices had replaced the obsolete leaflet CH1T(A) with CH1T(B) as instructed.
We carried out another survey last week, when there was no Christmas rush and no recent issue of slips. We spread the net wider to include 24 post offices. The results were that four post offices had no leaflets at all, nine still had only the basic leaflet but no correction slips, one had only the latest amendment slip but no basic leaflet, and one post office still had all three. What the unfortunate people of Andover made of that I do not know. Five post offices had the right combination, but only if one asked for them over the counter, and only three out of the 24 post offices had the right combination on display. It is a shambles.
But the consequences are far more serious. [Interruption.] The right hon. Gentleman asks whether I had nothing better to do. I expected a better comment than that. The inevitable consequences of this shambles is that there are still about 1 million families which ought to have child benefit but have not yet made claims. There is only eight weeks to go. Those 1 million families represent about one-third of the one-child families for whom claims have to be made.
My hon. Friend the Member for Wallasey (Mrs. Chalker) was told yesterday that at the end of January 2 million one-child families had so far made a claim. But 3 million claims were expected. That was stated in reply to the hon. Member for Sheffield, Heeley (Mr. Hooley). That means that there are still about 1 million claims to be made. That is inevitable. It is unrealistic to expect huge Departments to respond minutely to such changes of direction. It is like trying to take three giant tankers round the course of the race for the Admiral's Cup. Departments cannot cope with that kind of change of direction. We must now learn from the Secretary of State or the Minister of State what the Government will do in the last few desperate weeks. We have just eight weeks to go to get a proper take up.
Those 1 million families include many families with older children and will there-

fore lose the larger bits of tax allowance. They also include many of the neediest cases, those whom it is most difficult to reach. Their tax allowances will be cut and they will not receive child benefit.
The confusion does not stop with what the Daily Mail called leaflet lunacy. It involves many matters of substance. The Secretary of State's statement of 23rd September left more questions unanswered. The statement was peppered with such phrases as
will be decided later",
will have to be decided later",
will be the subject of a later statement".
It included matters such as phasing out the tax allowance for children under the age of 11, the arrangements for students, future arrangements for non-resident children and the revision of PAYE codes. The statement was not so much an announcement as an agenda.
When we had the Chief Secretary's statement of 16th November the full horror of the complexity of what the Government were trying to do began to emerge. That was the statement dealing with the reduction of child tax allowances. Instead of the present three rates of child tax allowance, the Inland Revenue will have to grapple with nine separate rates. For overseas children under 19, the existing three rates will be kept. For United Kingdom children who are the first children in the family there will be a different three rates, and for second and subsequent children there will be yet another set of three rates.
We should bear in mind that, when the Child Benefit Scheme was conceived and built on the tax credit Green Paper, it was envisaged that in place of the matrix of nine combinations of child tax allowance and family allowance—three rates of tax allowance and three rates of family allowance—we should be able to arrive at one rate of child tax credit, a major simplification. Now we shall have nine levels of tax allowance and three rates of child benefit. According to my simple mathematics, that means that a combination of 27 possibilities must now be applied, meaning an overwhelming new complexity in our system of child support. In addition, we shall have to have special rules for one-parent families, widows, students under 19 and overseas children—in that case different according to whether they are over or under 19.
If we take a perfectly ordinary, straightforward case, one offering no real complications, the result it baffling. My hon. and learned Friend the Member for Wimbledon (Sir M. Havers) received from a constituent a letter which is worth reading to the House. His constituent said:
I have a daughter of 19 at university, a daughter of 16 still at school and a son of 14.
Nobody could claim that that is an unusual family.
According to my husband's new notice of coding, his tax allowance for the first child will be reduced by £104 (for whom I shall receive no child benefit), for the second child by £130 (for whom I shall receive £1 per week child benefit), and by £130 for the third child (for whom I shall receive £1·50 per week child benefit). Hence the only deduction which makes any sense is for the third child! …On checking with the Inland Revenue today, I have been told that …although my second daughter counts as a first child for child benefit purposes, she has to be counted as a second child by the Inland Revenue. I would add that the man at the tax office told me that he personally felt that the whole scheme was quite crazy and had not been properly thought through.
I hope that in replying to his constituent my hon. and learned Friend pointed out that the scheme was hatched up by the Labour Party and the TUC and that it was perhaps a little optimistic to think that it had been properly thought through.
That letter provides a useful peg for a number of questions. The first concerns students. The Chief Secretary said in his statement that there were to be increased grants for students to compensate for the loss of child tax allowance. What will be the adjustment in the grants of students on advanced courses? When can we expect it to be announced? Child benefit starts in eight weeks. Will the increase in the grants take effect from April and cover the rest of this academic year, or will it start next September or October when the next academic year begins? Is it true that, as was said in the letter, a child can be treated as a first child for child benefit and as a second child for child tax allowance? If so, has that been taken into account?
What about the child over 19 who is on an advanced course but does not have a grant, perhaps because the course qualifies only for a discretionary grant or because his parent does not qualify? Will such a child lose the child tax allowance and receive nothing in return? Has that been thought of?
My hon. Friend the Member for Wokingham (Mr. van Straubenzee) has been warning the country that as a result of financial stringency many fewer discretionary grants are likely to be awarded in the next year. Therefore, many more families will be trying to see their children through college on their own, without grants. Are they to lose the child tax allowance and have nothing in return? We must have answers to that question tonight.
Worse is to follow. After the Chief Secretary's statement there was the Minister's statement about family income supplement. Even the experts in such organisations as the Child Poverty Action Group are having the greatest difficulty in understanding what will happen in eight weeks' time when all this starts. Some FIS families will receive the bare 30p extra. Some will receive 30p child benefit plus 25p more FIS. Some will receive 30p plus 50p more FIS. For one-parent families the position is even more involved. For some reason, they will receive an extra 17½p child benefit plus 75p extra FIS, giving an extra 92½p.
I do not suppose that there is any hon. Member, including Ministers, who can explain why that is so. But these families are supposed to understand it. Some will receive 17½p child benefit plus £1·25 more FIS and so on. How many more families will be brought into FIS as a result of these changes and, therefore, for the first time made dependent upon means-tested benefits?
There is a whole range of other matters. For free school meals there is one set of rules and there is the question of the appropriate amount of child benefit to be disregarded as income. There are different rules for housing benefits, and for milk and vitamins, there is yet another rule based on existing discretionary powers. We are also told that there will be special arrangements for the electricity discount scheme. The complications are fearsome.
There is a question of substance here on which we must have answers. I hope that I can have the Secretary of State's attention. I appreciate that he must consult the Treasury, as the Treasury probably has the answers when he has not.

Sir Geoffrey Howe: No, it has not.

Mr. Jenkin: Perhaps I am living in the past—

Mr. Ennals: Yes, the right hon. Gentleman is.

Mr. Jenkin: The Treasury knew the answers in my day. The question of substance is very serious and goes to the heart of the whole scheme. The introduction of a tax-free benefit such as child benefit or a tax credit is intended, among other things, to lift people out of dependence on means-tested benefits. That is one of the prime purposes of the entire scheme.
The House will recall that when we produced our figures we estimated that about half of the old-age pensioners would have been lifted out of dependence on supplementary benefit. But if at every stage of the introduction of a non-taxed, non-means-tested benefit like this, there is an automatic increase in the levels of every means-tested benefit, by definition nobody will be lifted out of dependence on means-tested benefits at all. That appears to be the Government's intention this time round. As a question of principle, will that be the position at each successive round of this phased programme? Will there be an intention to lift people out of dependence on meanstested benefits?
So far, I have talked about basic-rate taxpayers and existing welfare recipients, but what about taxpayers who pay at higher rates of tax? For them, the Government do not even pretend that the arrangements are fair. After all the crocodile tears from the Chancellor about the appalling tax burdens on middle management, the Treasury is now cheerfully conceding that the tax burden on many families will be increased, and it does not intend to do anything about it. The Chief Secretary to the Treasury said:
A minority of higher rate taxpayers could be slightly worse off than they would have been under our earlier proposals, but this only arises for those paying at a marginal rate of 55 per cent. or over".—[Official Report, 16th November 1976; Vol. 919, c. 505.]
Even if one accepts—and I do not—that it could be right to add to the tax burden of middle managers and professional men at this time, the situation is

far worse than the Chief Secretary suggested. If these people are parents of students they will be very much worse off, because, presumably, the improvement in the student grant will take account of the loss of the child tax allowance at the basic rate of tax. These people will lose their child tax allowance only at the higher rate of tax. Or is it suggested that the improvement in student grant should compensate for the higher rate of tax? If it is, that will lead to a new complication for the calculation of grant because for the first time it will depend on the marginal rate of tax of the parent.
Second, if the parents are receiving no grant at all and are trying to finance their children on their own, if they have two student children—there are plenty of families with that number of students—they could well find that they are hundreds of pounds worse off, and it may make it impossible for them to take their children through college.

The Chief Secretary to the Treasury (Mr. Joel Barnett): I have noted the right hon. Gentleman's concern not to have too many child tax allowances. Surely, he is not suggesting that we should have a special higher rate of child tax allowance. If he wishes to be fair about the figures, perhaps he will point out that in 1977–78 the loss to a man earning £9,000 a year would be £5·20 a year.

Mr. Jenkin: The Chief Secretary has not taken account of either of the points that I have made about parents of students. Even if it is right to increase the tax by that small amount, that still leaves out of account those with students over 19 years old, and no child benefit, many of whom will be able to get no compensation for the loss of child tax allowance. The Chief Secretary has to give a better answer than that.

Mr. Joel Barnett: With respect, the right hon. Gentleman has bundled together a package of questions. I shall not answer all his questions now—my right hon. Friend is more than capable of doing that—but the right hon. Gentleman is misleading the House in pretending that there will be a massive loss to the higher rate taxpayer. As I say, for a married man with two children under 11 the loss in 1977–78 is £5·20.

Mr. Jenkin: What about students? We must have an answer tonight about that, including the case of students who have been refused discretionary grants and who, therefore, have no grant at all.
Wherever one looks, this scheme is now in a shambles. The leaflet campaign has gone utterly haywire. Major Departments are struggling to cope with wild changes of direction and policy. There are massive new complexities in the tax system. There are added complexities with means-tested benefits, and there will be new bitterness among managers and professional people as they find themselves paying more tax. There will be new worries about student support, and real anxieties on the part of parents with children over 19 with no grant and no child benefits.
Looming over it all, with only eight weeks to go, is the fact that there are 1 million one-child families who have not yet submitted claims. The astonishing thing—I note that the right hon. Member giggled when I said that—is that this does not seem to worry Ministers at all. They are blind to the crumbling realities around them, and they continue to laud their achievements with almost biblical fervour. What was it that the Minister for Social Security said the other day at a meeting of the Child Benefits Now Campaign?—
The child benefit scheme …will be a central pillar of the Welfare State".
That is rubbish if it will crumble away in the way that I have described. The sad thing is that it could have been a central pillar of the Welfare State if the two mighty Samsons of the Labour Cabinet had not wrapped their arms around it and brought the whole edifice crumbling down. The Prime Minister and the Chancellor have a great deal to answer for in the shambles which they have caused.

Sir Geoffrey Howe: What about Delilah?

Mr. Jenkin: I see that Delilah is not in her place at present. Perhaps she would have saved the scheme if she had been there. Because of this threatening shambles, and because of our anxieties about the threatening debacle, we intend to divide the House tonight.

4.57 p.m.

The Minister for Social Security (Mr. Stanley Orme): I welcome the Opposition's choice of subject for the debate but I am surprised that they have used up half a day on this issue. They really are flogging a dead horse on the leaflets issue. Nevertheless, it gives me a chance to emphasise the Government's achievements on social security matters in general and on child benefits in particular.
Before going on to talk of those achievements, I say to the right hon. Member for Wanstead and Woodford (Mr. Jenkin) that we admit that there will be problems affecting the introduction of the child benefit scheme. But we had no answers from him about what he would have done, or the cost in public expenditure if he had taken the action which he is asking the Government to take.

Mr. Patrick Jenkin: I do not want to interrupt the Minister more than I have to—we have a short debate, and I made a short speech—but I spelled out in the June debate exactly what we should have done, at less cost than the scheme that the Government are proposing.

Mr. Orme: The social security measures introduced by this administration are among the most far-reaching innovations this decade. The new pension scheme will, on maturity, substantially raise the incomes of the elderly and reduce the numbers who currently have to seek help from supplementary benefits.

Mr. Robert Boscawen: rose—

Mr. Orme: If the hon. Member will allow me to develop these points, I shall give way later.
The disabled are being helped by a number of aids, such as the new mobility allowance and the new non-contributory invalidity pension. The method of family support is to be dramatically changed by the introduction of child benefits in place of family allowances and child tax allowances. The Government have nothing to apologise for on any of those points.
The introduction of these social policies would represent no mean achievement in good economic times. In the current difficult economic climate, they


should be seen as a real contribution to improving the lot of the less well off sections of our community.
Today's debate also gives me a chance to reply to the alarmist rubbish which has surrounded this subject and which has been reiterated by the right hon. Member for Wanstead and Woodford this afternoon. Because of the misrepresentations I would like to mention briefly the basic principles of the child benefit scheme.
Child benefit is non-means tested and non-taxable. The scheme has two big advantages over the present method of family support which relies on child tax allowances and family allowances. The child benefit will be paid to the mother, as it is typically the mother who is responsible for the house keeping in raising the children. This contrasts with the child tax allowances, which typically go to the father. Thus, income is transferred within the family from father to mother. Wage earners who earn under the tax threshold do not get the benefit of the child tax allowances, but they will get the child benefit. In the initial modest start to the scheme this April the benefit is £1 per week, but it will rise as the full scheme is phased in.
Let there be no misunderstanding. We definitely wished to introduce the full scheme, under which the child benefit rate would have subsumed the whole of the under 11 tax allowances. I am also aware that many of my hon. Friends would like a higher rate of benefit immediately. But this is an expensive proposition. I must point out that any additional resources put into family support cost £6 million a year for an extra penny a week on the benefit that is, a 50p increase would cost an extra £300 million in a year. Child benefit is one among a number of our priorities that have to be considered in the field of social policy. So it will be appreciated that no easy choices exist regarding the level of that benefit.
Hon. Members will appreciate that, given the economic situation, it was necessary to defer a decision on the benefit rate until it had to be settled for operational reasons. Then, in May of last year considerations of pay policy had added a vital new dimension to the problem

of transfer. This ruled out any complete overnight transfer from the pay packet to the purse. Conservatives are fond of referring to their 1972 tax credits scheme, so they should be aware of what the TUC had to say to the Select Committee about the child credit in this context. The TUC were not in favour of an increase in benefit to the mother which would be wholly clawed back from the husband's income. As regards the transfer of support within the family it wanted, in the late Lord Feather's words
some phasing of this transfer, as it were, from the pay packets to the mother's child credit".
That was in April 1973, not May 1976, and it underlines the massive problems involved in this change to child benefit.
Taking public expenditure constraints and pay policy together, the full child benefit scheme was not an immediate possibility. The suggestion of the right hon. Member for Wanstead and Woodford, that we could have had a low-cost full scheme, just does not stand up because of its disproportionate effect on take-home pay. Husbands with one child would have lost over £2 in their pay packets. The two-child family would have lost over £3, the three-child family would have lost over £4, and so on.

Mr. Patrick Jenkin: This matter was debated at the TUC Congress last September, and a resolution calling for a full child benefit scheme was passed, according to Press reports, with no dissidents at all. If the 39 million leaflets had been used to explain to trade union members that although their pay packets were to be cut their wives would be getting more in cash over the counter, the TUC would have fully understood what was happening.

Mr. Orme: The TUC wanted more public expenditure at that time. The right hon. Member for Wanstead and Woodford will find that the TUC support what the Government are doing at the moment. Of course, it would have been different if the transfer could have been improved by switching substantial extra resources on to the child benefit rate, but this is not a suggestion which people who are constantly complaining about public expenditure could put forward. Indeed, they recognised this in their "no extra cost scheme". I will


take criticism from my hon. Friends on this matter, but not from the Opposition Front Bench.
We had two choices at the end of May last year. We could either put off the scheme, or we could take the first step, which took account of the public expenditure and pay policy realities. Operationally—and I will not weary the House with a catalogue of the administrative problems with which my Department and the Inland Revenue were wrestling—we had to decide on the rate of child benefit there and then, and we had to be sure we could effectively put it into operation. We were determined to press ahead with the scheme—it really is nonsense to say we did not want it—and the only alternative in the conditions I have described was to provide £1 for the first child and tax it in the ordinary way.
Despite these difficulties we continued to work urgently on the method of phasing in the full scheme. The Government joined with the Labour Party and the TUC in a Joint Labour Party/TUC Working Party to seek a solution to this problem. The working party was unique in that it brought together the TUC, the National Executive of the Labour Party and Government Ministers, and during this meeting we worked out the phasing-in proposals that will now be put into effect. It took a great deal of intensive work to enable us to announce the September scheme as soon as we did. I should like to pay tribute to the members of the joint working party for their sustained and constructive help, particularly my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham). The hon. Member for Rushcliffe (Mr. Clarke) has had details of the factual evidence which the Chief Secretary and I contributed to their deliberations.
The result of this further consideration was the scheme announced by my right hon. Friend on 23rd September, with the consequential tax arrangements announced by my right hon. Friend the Chief Secretary, on 16th November. This is the scheme that is going ahead and it is not on the rocks. I am sure it will not disappoint Opposition Members—or perhaps it will disappoint them—if I say that it is going ahead very satisfactorily.
I must point out to the House that under the scheme the transfer from pay

packet to purse will take place over three years. In the tax year beginning April 1977, the mother will receive £1 for the first child and £1·50 for the others, and in a family paying basic rate tax the father will lose 70p. In the next two years, take-home pay will be reduced, in two further stages, by further reductions in the CTAs, which will be made good by increased child benefit payable to the mother. On current tax rates and allowances the further transfer from take home pay to benefit over the two years taken together would be £1·32 a week for the first child and £1·14 a week for every other child. How this will be divided between the two years will be announced later. I think that there is still quite a lot of explaining to do, certainly to husbands, about this transfer and what it means.
In spite of their criticism, it is apparent that the Opposition have little to criticise. They have focused their criticism on a minor administrative problem. Instead of giving credit to the Government for introducing this major social change, all they can do is bleat about leaflets. Let me give the House the facts, therefore—

Mr. Patrick Jenkin: The right hon. Gentleman must not say that. I spent less than a third of my speech talking about leaflets, and I have asked him many serious questions. If we do not get answers to those questions this evening the right hon. Gentleman will have much to answer for.

Mr. Orme: Any valid questions will be answered by myself or by my right hon. Friend when he winds up. The anger that the right hon. Gentleman managed to work up, however, was misplaced.
Last May, for the reason I have explained, we had to change our original intention to remove the whole of the tax allowances for children under 11 in April 1977. By this time the leaflet CH1(T) was printed and delivered to the Post Office depot. There are, through the Post Office, 24,000 outlets, and they may be unevenly distributed. Do I gather from what the right hon. Gentleman said that he would prefer to have fewer outlets? Or would he prefer to have the 24,000 that are spread throughout the country? Reprinting the whole thing would have meant, apart from the waste—which was £300,000 for the initial


leaflet—abandoning all hope of introducing the first child benefit in April 1977. Instead, a one-page information slip, CH1(T)A, was printed to correct, where necessary, the information in leaflet CH1(T).
After the joint Labour Party/TUC working party had evolved a method of phasing in the child benefit scheme over the period 1977–79 it was necessary to print a new information slip CH1(T)B explaining the current position. The Post Office replaced the previous information slip with CH1(T)B, and this latter slip accompanies the main leaflet and claim form CH1(T). It does not act as a substitute for the main leaflet.
I dealt with all these points in answering a Question on 27th October. My right hon. Friend the Chancellor also wrote at great length—it seems to have been a waste of time—to the right hon. and learned Member for Surrey, East (Sir G. Howe) and the right hon. Member for Wanstead and Woodford, so that it is very surprising that Conservative Members should continue to bring up this issue.
Let us get the basic facts straight. There has been time enough for these changes: the scheme does not start until April. No one can now be in any doubt as to the details, the vast majority of which are still percisely the same as they were when the main leaflet was printed to reflect the original full scheme as planned. This leaflet, with the appropriate correction slip, has been in post offices since the end of November, and since the Chief Secretary's statement no one can be in doubt on the consequential tax arrangements in 1977–78 which are very clearly covered in the leaflet issued with the individual tax coding notices.
Hon. Members are perfectly entitled to say that we have made two changes. So we have, and I do not apologise for that. We listened to what Parliament said and we made the changes. We have never denied making the changes; indeed I have myself underlined the fact by pointing out that we had very solid reasons for doing so. This scheme covers virtually every child in the country. Because the administrative processes of launching such a vast scheme had to start well in advance of the scheme itself there have

been changes in the account of the scheme we have had to give to families. This is a very different matter from saying, as the Opposition keep repeating, that there is considerable confusion and inconvenience.
The big change between the May and September schemes was simply that the benefit became tax free. This made no difference whatever to the vast majority of families, who pay the basic rate of income tax. The mother's benefit is the same, and the father's take-home pay is affected to precisely the same extent. For those paying higher rates of tax the change means that it is now always worth while to claim. This is not confusion, but a simplification.
If people were confused one would expect both a high proportion of unsuccessful claims and poor take up. The take-up position of all those families now getting family allowances is safeguarded. They do not need to claim. Many will simply receive their new child benefit by way of orders for the higher amount in the annual order book which contains their family allowances up to next April. Others—about 2 million—need only, in the course of this month, take or send their order books to their local offices for uprating.
Of those families with one dependent child who need to claim we already have 2 million claims. In fact, the Newcastle office today received its two-millionth claim. Allowing for the "converted" and uprated order books, we already have an effective take-up rate of about 90 per cent., and there are still two months to go. So much for the confusion.

Mr. Peter Bottomley: Will the right hon. Gentleman spell out how many more claims are needed to secure full take-up?

Mr. Orme: The hon. Gentleman is anticipating my next few words. There are now about 800,000 claims outstanding. They have been reduced in number quite dramatically, but I cannot claim that we shall have virtually complete take-up by next April. Nor can I say that if we get a sudden last-minute rush even the resources of our offices at Newcastle and Washington—I pay tribute to the work of our staff there—could cope immediately. That is why the last stages of our


extensive publicity campaign will be concentrating on claims this month rather than next.
If, at worst, however, there are some late claims, or a sudden bunch of claims at the end of March, no one will lose out. There is a year's grace, and arrears will be paid as soon as possible. We are talking about, at most, a small minority who, despite the continued publicity, have not claimed yet and who are under no threat of eventual loss of benefit if they do not do so. It might make for administrative convenience, but it would surely be wrong, to try to dragoon them. For many people—for school leavers at the end of May, for example—relatively little is at stake. Also, many better-off people who normally rely on their accountants in tax matters may simply be postponing their claim.
As I have said, this is a small minority at most. Overall take-up is already very good. What then about the other and more significant indicator of confusion—the unsuccessful claim? Two million claims have been received. Of the 1·5 million decided by December last year, only 329 have been disallowed. Not much confusion there!
Let me say in conclusion that the child benefit is a central pillar in our social security system. When the transition is complete the scheme will usher in a new era in family support. This success is one of which we on the Labour Benches are justifiably proud. We already have a 90 per cent. take-up rate, and I urge hon. Members to bear in mind that we are dealing with about 7 million families and nearly 14 million children.
Although the April 1977 phase 1 of the child benefit scheme is modest, it is clear that the scheme is getting established. It has been an achievement to make the administrative price minimal for the public at large. It has also been an achievement to find about £90 million for family support in 1977–78 after the substantial increase in family support less than a year ago. The arrangements for launching the scheme have been both thorough and widely discussed. The only shambles is the Opposition's pitiful attempt to discredit the scheme.

5.18 p.m.

Mr. Tony Newton: I am left almost speechless by the speech of

the right hon. Gentleman. I had already gathered from our proceedings in Standing Committee on the Social Security Bill that his normal answer to difficult problems was to address either the Committee or the House as if it were a rowdy public meeting in Salford. That is roughly what we have had again this afternoon. He told us that no one could now be in any doubt about the details. If that is his position, why did he not answer some of my right hon. Friend's questions? Barely one of those questions has been answered.
We have certainly heard no convincing explanation of the fact that 1 million of those who are among the primary targets of this benefit have not yet claimed, despite preparation for the scheme having been under way for a year. If the right hon. Gentleman thinks that the explanation he has given today will satisfy my hon. Friends or many of his hon. Friends, I suspect that he has another very big think coming in the course of the debate.
I understand that the right hon. Gentleman is on a difficult wicket. That difficulty was clear throughout his speech. However, I do not think that even he believes that there is no confusion about the details of the scheme and nothing to worry about in all the complexities of the leaflets. The right hon. Gentleman should not overlook the fact that there will be genuine and considerable confusion among many people about the effect on their family allowances.
The real reason for the concern now being expressed by my right hon. and hon. Friends does not arise merely because of the stupidity of the leaflets issued and the jokes that can be made about the farcical situation in post offices; it is because there is a real danger that the way in which this affair has been handled will end up discrediting the whole approach to tackling the family poverty problem and the approach to the confusion of our tax and social security system, the latter being one of the most important problems that we have to face.
The more that Ministers dismiss this problem and the more that they fail to face the difficulties that the public are facing over the scheme, the greater risk they run that, as a community, regardless of party politics, we shall not derive from the approach now being adopted the advantages that all of us would like to see.
This is a short debate and I do not want to add very much to what my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) has said about the muddle, the leaflets, and various other matters. I think that he made his points tellingly, in a telling speech. He asked nearly all the questions that needed to be asked. As they have not been answered by the right hon. Gentleman, we can only hope that the Secretary of State will answer at least some of them at the end of the debate.
I shall mention only one specific problem before turning to slightly wider issues. What alarmed me as much as anything else in the past half hour was that neither the Minister nor his right hon. Friend the Chief Secretary of the Treasury could begin to answer what my right hon. Friend had to say about students, especially those who do not have grants.
This is not only a matter of students who do not have grants because their parents are so well off that the parental contribution is virtually the whole of the grant; also involved are students who are not getting grants because they are eligible for only discretionary grants, and discretion is not being used in their favour. Those students and their parents represent a hard-hit group. Many of them are in the same group that is being especially hard hit by the increase in university fees. As far as I can judge, they are getting no compensation. If they are now to suffer under the child benefit scheme it will be disgracefully unfair and will do serious damage to an important part of our education system. We must have an answer to the students' problem.
I shall now deal fairly briefly with two further points, on a broader theme. Part of the purpose of the debate, apart from helping Ministers to clarify to the House and the public what they have in mind, should be to look to the future and the way in which we are moving in respect of our tax and social security systems, to consider how we can undo some of the damage that has been done by the muddle that has occurred, and, further, to consider how we can rescue some of the opportunity that has been missed by the Government's handling of these matters over the past two or three years.
First, I turn to Budget implications. It is inescapable in this scheme that tax thresholds, not so much on family income but on the earnings of the family breadwinner, will fall by a minimum of £2 a week. That is inescapable from the fact that in the case of the first child there will be a deduction of £104 and no offsetting benefit through the tax system arising from the removal of the old reduction of allowances for the family allowances. There will simply be a straightforward reduction in the tax threshold of the breadwinner of £2 a week for the 3 million who have one child. The effect of the tax thresholds for all the other groups with more than one child will be more complicated.
It is an inevitable part of the scheme that tax thresholds on earnings will drop by £2 a week for families with one child. I accept that in principle, but we must recognise that because of the way in which the tax system has been affected by the right hon. Gentleman's earlier policies, because of the rising worry about tax and because of the fact that tax thresholds have fallen in real terms, there is a serious problem, and we shall add to the disincentive effects that are already so powerful in our tax system, even among those who may understand the concept of family income as a whole and the effect on the family income as a whole.
First and foremost, I believe that there is an important implication in all this for what the Chancellor should be doing in his Budget. I do not expect social security Ministers to answer for what the Chancellor will do in his Budget, but it is my view that we cannot afford to have this drop in tax thresholds at this moment, however good the reasons may be in principle, especially after what has already happened. Among the tax reductions that the Chancellor is evidently to include in his Budget should be an increase in the married man's allowance of at least £104. I say that it should be at least £150 so that the effect will be mitigated for at least the majority of families that would otherwise be affected by what is being done in the scheme.

Mr. George Cunningham: Perhaps the hon. Gentleman will clarify whether he is referring to a reduction in the tax threshold this April or over the whole period of three years of the phasing in of the new scheme. Surely it is true that no net reduction is


occurring in the tax threshold this coming April; it is a reduction that is wholly offset by a corresponding increase by making the family allowance untaxable.

Mr. Newton: Not—I think the hon. Gentleman will agree—in the case of those who do not at present receive family allowances. That is why I have concentrated on the one-child family. In that case there will be a reduction of £104 in the child allowance. They will have no offsetting reduction in the existing tax allowances.
Let us assume that it is the man who is the breadwinner. For that man there is a straightforward reduction in the tax threshold on his earnings of £2 a week. The effect is much more complicated in respect of two-child families, where it is necessary to make allowances for the existing reduction in tax allowances arising from the existing family allowances. I have not gone into those matters as they are complicated. However, any family that is to get child benefit will at least get a reduction of £2 a week in the tax threshold on earnings—that is the tax starting point on earnings—arising from the minimum reduction of —104 in the tax allowance for children.

Mr. George Cunningham: But there will be £1 tax free that will be new and additional to what they have had before.

Mr. Newton: It may be that I did not make myself fully clear. This is a complicated matter. I stress that I was talking about the tax threshold in relation to earnings and not in relation to family income. That is why I accept that in principle it is a reasonable thing to do. However, I believe that at this stage it is a matter that we have to take seriously—this is why the TUC was worried last year—because of the psychological effect on many men at a time when tax burdens are already so high and tax thresholds are so low.

Mr. Robert Hughes: The psychological effect that the hon. Gentleman has mentioned will apply at the beginning, but once people get used to it the effect will diminish.

Mr. Newton: That may well be true. My judgment—I suspect that it is the TUC's judgment—not least arising from the statement that the TUC has issued about what it would like to see happen

in respect of income tax, which even 10 years ago would have been regarded as an incredible statement to come from the TUC, is that there is now sufficient worry about the burden of tax and the low level to which thresholds have fallen to make these matters important problems.
In a Budget in which the Chancellor, we hope, will find room to reduce taxation—I certainly think that he should find that room—he should also seek to offset to the maximum possible extent the effect of the reduction in tax thresholds on earnings. If he does that, he will minimise the problems that will otherwise be faced by those who do not necessarily fully understand the scheme and will automatically go a long way to offset the effect on the higher earnings to which my right hon. Friend referred—which I, too, believe is a serious matter.

Mrs. Audrey Wise: Does the hon. Gentleman realise that his proposal to increase the married man's allowance would mean giving help to families which may consist of a man and wife both earning with no children? Would it not be more sensible to concentrate the money on the children?

Mr. Newton: Yes, it would. I must ask the indulgence of the House. I had better not give way to any more interventions, because this is a short debate and my speech is being extended. I have deliberately not gone into that matter any further because it would take me into the complexities.
The trouble is that the Chancellor and the DHSS have boxed themselves into a corner as a result of what has happened. I should like the benefit to be concentrated on families with children, but there is no way currently of doing that except by increasing the basic rate of child benefit. That apparently is not an immediate option. I hope that it will be taken as soon as possible. The only other way would be to introduce a compensating increase in child allowances. But that would create the same problem in the same way this time next year.
I suggest that there is no way of entirely solving the problem, but tackling the married man's allowance as a priority in any tax reductions is at least one method about which the Chancellor should be thinking in deciding what tax reductions to make in his Budget. It is


not a perfect solution, but it would go some way towards solving these problems.
In view of the interventions which have been made, I shall curtail the rest of what I intended to say. We all agree that we want to proceed in a direction which will bite into the poverty trap, reduce the size of it, take people out of supplementary benefits and reduce means testing. There is agreement in principle between Opposition Members and the Government Front Bench about the need for a scheme to make it possible to tax short-term benefits as an additional help to rationalising our tax and social security systems.
It seems clear that what the Government are proposing will do very little to achieve any of these aims. We are looking not for an explanation by Ministers of the muddle into which they have got themselves over leaflets, but for a commitment to move forward as fast as possible not just to child benefits but to the whole concept of the tax credit scheme which the Opposition, when in Government, put forward and would by now have sought to implement.
A great deal of the debate on these matters is in danger of becoming totally sterile. One group of hon. Members is apparently mainly worried about social security abuse and another group claims to be mainly worried about abuse of the tax system. Surely we should be able to agree that both problems need to be taken seriously. It is often the same people who are abusing both systems. Does anyone suppose that the moonlighter who is doing a part-time job when he is claiming social security benefit declares his income to the income tax authorities? Of course not. He is an abuser of both the social security and the tax systems.
There are problems with regard to means tested benefits, take-up, and so on. To talk about scroungers takes us no further. The problem is the number of people who have been put into an intolerable situation because of the way that we organise our tax and social security affairs and the growing number of people who are not very much better off by working than by not working. They are not scroungers, but they are put into an intolerable position.
We must tackle this fundamental problem. We shall be able to deal with it only if we move beyond the child benefit scheme and apply the concept of tax credits to the whole of our tax and social security systems. I should like the debate to move away from the details of the leaflets. I should like to hear more about the details of the scheme, but T think that we ought to concentrate on how the Government propose to build on what we are talking about and to tackle the fundamental problems facing us in this area.

5.35 p.m.

Mr. John Ovenden: I welcome this debate, although I fear that, as usual, it was initiated for the wrong reasons. However, the debate gives us the opportunity of discussing the problem of family support and what we as a nation should do about that issue.
Recently I asked the Chancellor of the Exchequer what we were doing and what we had been doing in recent years by way of giving support to families through the tax system, because it is only through that system that we can give the majority of them our support. I was appalled to discover that the real value of the allowances given to families has declined considerably over the last 15 years. I was told by my right hon. Friend the Financial Secretary to the Treasury that whereas in 1961–62 a single person had a tax allowance of £203 a year and in 1976–77 he had a tax allowance of £238 assessed at 1961–62 prices—an increase of 15 per cent.—a married couple with four children with a tax allowance of £910 in 1961–62 found that had fallen to a real value allowance of £763 by 1976–77—a 16 per cent. reduction.
Successive Governments have a pretty shameful record of support for families. They have an even worse record if we attempt to make international comparisons. There are few European and non-European countries with which we stand any comparison in this league. That is why it is important to talk about the whole level of family support and why we should commit ourselves to policies aimed at relieving the problem of family poverty.
I have always regarded the introduction of child benefits as a major plank in the social security system. That view is shared by most organisations concerned


with family poverty. When the Child Benefit Bill was introduced the Child Poverty Action Group said:
This Bill when fully in force will be the most important change since 1946 in provisions within the social security system for the maintenance of children.
That was no exaggeration. The telling words in that statement were "when fully in force".
It is a source of regret to many Labour Members that it will not be possible to go ahead with the full introduction of the scheme in April 1977. Many of us still remain unconvinced by the explanations which were given for the deferment. However, we are now in that situation. We must make the best of it and get the scheme introduced in full as soon as we can. It is important to go ahead with the scheme and to get away from the farcical system of tax allowances on which we have so far relied for family support. It is a farcical system which gives more help to those with the highest income than to those with the lowest incomes.
We have today witnessed another example of the confusion in the minds of Opposition Members about what they want to see in a system of child benefits. My justification for changing from a tax allowance to a child benefit system is to get away from a system which gives more to the wealthy and less to the poor. Yet the right hon. Member for Wanstead and Woodford (Mr. Jenkin) has today condemned the system because it does not give as much help to the man on a tax rate of 55 per cent. as to the man on 35 per cent. I understood that we wanted to get away from that ridiculous system. Surely we do not want that privilige to be enshrined within a new system.
The hon. Member for Braintree (Mr. Newton), criticising the whole basis of the child benefit system, said that we should go ahead with the child benefit system and the reduction of child tax allowances only if we could compensate taxpayers by increasing their allowances in some other way—for example, by giving them a higher married allowance. The hon. Gentleman seemed to be raising a fundamental objection to the principle of the child benefit system.
The idea of having a child benefit system is to reduce tax allowances and

to get away from the old system. We do not want some cumbersome machinery to restore the tax allowances that have been taken away. Indeed, as my hon. Friend the Member for Coventry, South-West (Mrs. Wise) pointed out, the scheme proposed by the hon. Member for Braintree would give a great deal of assistance to people with no family commitments at all and in particular to those married couples both of whom are working an enjoying a high standard of living. That is not a cul-de-sac into which we should be led.
This scheme is a vital step towards tackling family poverty. It does something for the 200,000 families who have been too poor to pay tax and have, therefore, never benefited from the tax allowance system. It is also a vital step towards improving the living standards of people in work.
We have heard much synthetic indignation about people who are better off on social security than at work. If such people exist the situation is shameful, but, it is a grave indictment, not of the generosity of our social security system, which is not particularly generous, but of the neglect of family poverty in this country, particularly of those who are in full-time work.

Mr. Robert Hughes: It is also a reflection of low wages.

Mr. Ovenden: I agree with my hon. Friend for Aberdeen, North (Mr. Hughes).
A realistic level of child benefit will go a long way towards tackling the problems of family poverty. The present system of means-tested benefits is a nightmare for everyone. It is a nightmare for hon. Members who are expected to understand the system and explain it to their constituents. It is a tangle for people who have to wade their way through it. The more we can dispense with means-tested benefits the greater contribution will be made towards solving the problems. Benefits should be available as of right.
Child benefit does not carry the stigma and disincentive to claim carried by means-tested benefits. I have never heard anyone suggest that there is a stigma attached to the acceptance of family allowances. All levels of society accept and claim family allowances. However, stigmas are attached to many means-tested benefits. That is the reason for


the relatively low take-up rate of family income supplement, rent and rate rebates, even though those schemes have been in operation for a long time. The means-tested approach to the problem will not work. Means-tested benefits should be replaced by universal benefits which people accept as their right as citizens.
I regret the decision by the Government to defer the scheme. They should look again at the timetable. The joint committee's plan is not the last word on the issue. Perhaps at that time, when the scheme was considered in the current economic climate and when there were administrative problems, that plan might have been the best that was available, but circumstances change and economic circumstances change particularly.
All hon. Members must have read in today's newspapers about the rumours of large tax cuts next year. It has been suggested that the standard rate will be cut from 35 per cent. to 25 per cent. Although I usually regard as ominous the presence in the Chamber of the Financial Secretary to the Treasury, I am sorry that he is not here now. The Treasury should look at the child benefit scheme to see what priority can be given for its speedy introduction. If money is to be available in April for tax cuts on the scale that is rumoured that money should be devoted instead to provide social benefits, and child benefits should be given the highest priority. If the money is available child benefit could be introduced at a more realistic and more generous level than has been assumed in the past.
That would ease its introduction and overcome many of the objections that existed in the past. It would overcome the objection, for instance, that a child benefit scheme would only transfer money from the wage packet. We would be able substantially to increase total family income, and that would go a long way towards overcoming the objections that have been made.
If money is available we must use a fair proportion of it for social benefits rather than for tax cuts. We must not repeat the appalling mistake that was made last year when, at a time when we were supposed to be reducing tax allowances and introducing a system of child benefits, we increased child tax allowances

and made the problem worse. That was an example of the lack of liaison between the Treasury and the Department of Health and Social Security. We must use our money wisely and bring in the child benefit scheme.
The debate is short and I shall try to be brief. The Minister spoke about priorities. Government Ministers often talk about priorities in a narrow sense. The Minister spoke of priorities within our social services. It is our job to look at priorities in a wider sense. We did not do that last year. That is why we had the mix-up about child tax allowances and child benefits.
The Minister said that by every 1p by which we increase child benefit the cost is £6 million. That is a high level of expenditure and one at which we must look carefully within the context of our overall priorities. There have been occasions when the Government have spent money on far less desirable projects than child benefit. With some of my hon. Friends I went into the Lobby to oppose tax cuts amounting to £100 million for people who were earning £6,000 a year. That sum of money could increase child benefit by 16p. I also went into the Lobby to oppose the £500 million increase in defence expenditure. That sum would have made 80p or 90p available for child benefit. We must look at the overall priorities within Government.
When we are asked to approve larger and larger sums of money for projects that can hardly be regarded as worth while and to approve tax cuts which are not socially necessary or desirable we must bear in mind that we are deferring for a long time a major attack on child poverty.
I shall not go into details about leaflets as some hon. Members have done, but I shall raise a few detailed points about the scheme. I apologise to my right hon. Friend if I have the wrong end of the stick, but if I have, that indicates that there is more confusion than the Minister is prepared to admit.
I shall deal first with the problems of widows and whether they will get anything out of the new scheme. I understand that there are to be adjustments to the widows' tax bill so that what they lose on child tax allowances will be made up. I understand that a widow's child allowance is to be reduced to cancel out


the child benefit and that that may have overcome the fear of many widows that they will lose money, but I do not see how widows will gain. The net result for most widows will be nil. Most standard taxpayers will receive a net benefit of 30p a week and those on the higher tax level a net benefit of 40p. Widows are the only people who will get nothing at all. If that is true, I hope that my right hon. Friend will see what he can do about it, even within the next eight weeks.
It grieves me very much to agree at any time with anything said by the right hon. Member for Wanstead and Woodford. However, although he may well have exaggerated and may have tried to make far too much political capital out of the affair of the leaflet campaign, many of us on the Government side of the House are very aware of the fact that there has been confusion, and that amendment slips, for example, have been missed out of leaflets. One constituent came to me in great panic because she had read the leaflet without the amendment slip. The amendment slip had not been inserted. She was being told that as from April she would get £1 a week child tax allowance and that her husband would lose the whole tax allowance for that child. That is a terrifying prospect with which to be faced. This alarm was caused by the fact that this matter was handled in the way in which it was.
My right hon. Friend the Minister for Social Security said that the Government had no option but to send out amendment leaflets because of the time factor and that the cost was such that we could not reprint the leaflets entirely. I am not utterly convinced by that. I have found on occasions that when Governments really want to get out leaflets and propaganda they are quite capable of producing leaflets at vast expense and very quickly.

Mr. Ron Thomas: With the pay policy.

Mr. Ovenden: As my hon. Friend says, with the pay policy. I was about to give the example of the Common Market referendum. When the Government wanted to brainwash electors into supporting their stand the leaflets were made available at far greater cost than these would have involved, and very quickly as well.
It would have been far more satisfactory if we had been able to produce a new leaflet. It would have been even more satisfactory if we had gone ahead with the original scheme. We should not then have had to reprint the leaflets at all, but that is another point.
This is a short debate. I do not want to take up any more time. I am grateful for the opportunity to make those few points.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): It may be of assistance to the House for me to mention that, including the winding-up speeches, eight right hon. and hon. Members give me the impression that they may want to catch my eye. I understand that the debate ends at 7 o'clock.

5.52 p.m.

Mrs. Margaret Bain: As is often the case in debates such as this, I find myself in the position of yet again having to remind the Government Front Bench that there is more than one Opposition party in the House. I listened earlier to the righteous indignation of the official Opposition spokesman. We become extremely angry, listening to such speeches, when the official Opposition increasingly refuse to set out their policies on public expenditure cut-backs. The Scottish National Party has consistently opposed public expenditure cutbacks, and we would remind the Government of that fact in this debate.
We on the SNP Bench have supported the child benefit scheme throughout its passage in the House, because we, like the hon. Member for Gravesend (Mr. Ovenden), believe that it is an important plank in solving the problem of poverty in this country and in the whole system of family support. However, those of us who have followed this legislation from the outset must be forgiven if we feel that not only is the general public confused but we ourselves are confused.
First, we were told that the scheme could not be implemented any earlier because there was trouble with a computer. Then we had the situation of various Cabinet leaks, and more fury was exercised over the fact that there had been Cabinet leaks than was exercised over the fact that there had been a killing off of a commitment to the scheme.


Those of us who believe in open government felt that the wrong priorities had been given to those matters. Finally, we have the changes in the different leaflets and amendments. Therefore, we find it difficult to know what is happening about this scheme.
I ask for a genuine commitment from the Government this evening that the legislation will be fully implemented by 1979 so that those of us who deal with the problems of our constituents can reassure them, because they are genuinely concerned that some of the very good aspects of this legislation will not be implemented, in that they have seen their hopes raised and then dashed.
Back-Bench Members are being inundated with letters on this subject. Like the hon. Member for Gravesend, I also raise the question of widows. I have in my hand a letter signed "Disgusted Mum". When the person concerned first applied, as a widowed mother, for the interim allowance, she was told that as a widowed mother she was ineligible. She then received her allowance book for £1 a week, which was to start in April, but she has now received her new widowed mother's allowance book, only to find that £1 a week has been taken off her pension, so that she is no better off. Will the Government review the position of benefits for widows?
The take-up level is one of the more important aspects of the issue at stake today. The Minister said that 800,000 cases were still outstanding and had not been taken up. He pointed out that there would be a year's grace and that arrears could be claimed next April. What worries me is that it is precisely those people who are most in need of this type of benefit who are the least likely to apply for it. Those of us who work in constituencies where there are high levels of poverty know that it is those in most need who are most reluctant to come forward and to make claims. Will the Minister give the House an indication—I do not imagine that he will be able to do so tonight, but at some stage—of the analysis of the levels of income of households for which the take-up has already been implemented? I feel that we should thereby discover an interesting fact—that it is those on the lowest levels of income who have not taken up the benefits.
We should bear in mind that this is taking place against the whole background of public expenditure cuts, unemployment and rising prices, which are affecting this section of the community the most. One of the more optimistic statements that has been made in the House recently was during the most recent Question Time to the Treasury. In reply to the hon. Member for Caernarvon (Mr. Wigley), the Chancellor of the Exchequer indicated that tax thresholds would be raised at the next Budget, although he could not give any indication of the details of that. Perhaps we could have a reassurance from the Department tonight that it is putting pressure on to ensure that tax thresholds will be rising and that the money necessary for the child benefit scheme will be made available as soon as possible.

5.57 p.m.

Miss Jo Richardson: Like the hon. Member for Dunbartonshire, East (Mrs. Bain), I listen with a certain amount of scepticism when the official Opposition talk about bringing in the scheme in a much better way, because I have serious doubts about whether they would have brought in such a scheme at all.
I absolutely agree with those of my hon. Friends who campaigned very hard indeed for the original scheme to have been brought in. We all still wish that it had been brought in in the way in which it was originally conceived. In that event it really would have been something. It would also have overcome the criticisms that are now being levelled from all sides about the confusion that has arisen regarding forms and so on. I shall be making a couple of points about that shortly.
The compromise scheme is better than the second suggestion that we had when the first scheme was abandoned—of paying and taxing a £1 family allowance for the first child. That was quite iniquitous. However, it would have been much better all round if we could have had the proper Child Benefit Scheme in its original form and the tax-free allowance, which would have netted about £2·70 or £3 into the pocket of the woman in the family. That is something for which all Labour Members have been workng for a long time. It would have replaced


the family allowance and child tax allowance and have given one straightforward tax-free scheme which would have been simple for everyone to understand.
Now, we shall be phasing out the rest of the child tax allowance over the next few years and using it for child benefit. I hope to goodness that it will not be used for anything else. That always makes me nervous, and I, like my hon. Friend the Member for Gravesend (Mr. Ovenden), wish that the Chief Secretary had been here to listen to what I have said. It will mean that by 1979—when tax allowances are properly phased out and added to child benefit—a benefit will be paid in that year at a rate which some of us feel would be too low in 1977. It will not take account of any inflation.
The original scheme would have been something on which to build. It was not stopped by cohabitation, and it would have bridged gaps which other benefits will fail to look after. But we have killed that, and we do not have a Child Benefit Scheme at all. We have a family allowance scheme dressed up and called a Child Benefit Scheme, and we might as well acknowledge that.
I think that there is considerable confusion about what is intended, and we might as well face it. We have all had queries from our constituents about this. I was interested to read in The Sunday Times two or three weeks ago—in the Business News, no less—in an article entitled "Your Tax and You", a tax expert describing the effects of the Child Benefit Scheme. I was horrified to note that even he, expert though he is, got one fundamental point wrong and made several misleading statements. Fortunnately, somebody corrected him the following week. I am not blaming the author of the article, but if he is confused how much more confused are those who will claim?
I want to ask specifically about the order books. As I understand it, for one-parent families—I am talking only about them now—there are two books, not one. One book is for £1, which is the Child Benefit Scheme. The other is for the extra 50p which single-parent families will receive in the form of £2 orders. In other words, they claim four weeks' payment in one £2 order. The hon. Member for Wallasey (Mrs. Chalker)

is looking confused, so perhaps I had better restate that. As I understand it, there will be two books for single-parent families. One will be for £1 and the other will be for 50p, but the 50p allowance will be collected in the form of a £2 order—that is, covering four weeks. That is confusing enough, and although I agree that there are many lone parents I cannot see why a single book could not have been issued to cover their allowances.
However, the situation is even more confused, because the title of the old child interim benefit which lone parents claimed has now been changed to child benefit increase. What is more, that increase is issued from Blackpool. The book comes from Blackpool, but the £1 for the child benefit comes from Washington New Town. From inquiries that have been made at official level in the Department—not at ministerial level—it seems that neither the twain shall meet. One part of the Department does not know what is being dealt with by another part. If we get confused by two books, heaven help the lone parent who is trying to find out what is supposed to happen. Why could not the books have been made more simple? In fact, why have two books and why have two offices? Why have two sets of civil servants?
I know that we need civil servants. I am not one of those who believe that we should cut down the number of civil servants in this Department—far from it. I wish that we had more staff in my local social security office. They are so hard-pressed that they are unable to carry out routine checks on pensioners and people in receipt of supplementary benefit to make sure that they are receiving their full entitlement. That is the purpose for which we should use our civil servants, and not for the kind of duplication that is being carried out here.
My other point relates to the tax form or, more specifically, to the notes for guidance on child benefits. I find these notes which are going out for 1977–78 utterly confusing. These notes ought to be one of the main sources of information for wage earners. They are something that wage earners read closely. This was a golden opportunity for the Government to get over their case about the full impact of the scheme. It is of the utmost importance that these notes should be as


clear as possible, but in fact they are almost unreadable.
The notes do not emphasise the intention and overall effect of the changes, and they do not explain what the whole thing is about. There is a sentence in section 3 of the notes which tries to explain the overall impact. It says:
The £104 and £130 reductions are the same as the amount on which tax would have been due if child benefit (of £1 and £1·50) had been taxable like family allowances (including the £52 reduction from personal allowances).
I read that three times and I still do not quite know what it means. That, however, is supposed to be the explanation that wage earners have to follow.
I hope that it is still not too late for the Treasury to give an instruction for an explanatory note to be sent out with these tax forms. I understand that not all the forms have been sent out. The note should be in simple terms explaining what the whole thing is about. We have heard a lot about the dangers and difficulties of wage earners not understanding why their tax allowances will be phased out. Here is a golden opportunity for clearing up any misunderstanding.
I echo what was said by my hon. Friend the Member for Gravesend. We want to press the Government as hard as possible to phase in the scheme more quickly than is their intention at present. I impress on my right hon. Friend the need to make these benefits reviewable annually to take account of inflation. It is ludicrous to give £1 or £1·50 and say that that will continue to be paid until 1979, 1981 or any other date without attaching it to the cost of living to make sure that those who genuinely need this sum added to their income have it inflation-proofed. I hope that the Minister will discuss that suggestion with the Treasury.

6.8 p.m.

Mr. Robert Boscawen: I should like to clear up one confusion which the hon. Member for Gravesend (Mr. Ovenden) added to the debate, amongst all the others. He said that the Conservatives were not wholly committed to introducing a scheme that would abolish tax allowances and replace them by a form of child credit. That is not so, for it is the essential way for bringing help to

those on low incomes below the tax level. On previous occasions when a Chancellor of the Exchequer has been able to improve the lot of taxpayers by reducing the level of tax, he has not been able to bring benefit to those most in need. It was my hon. Friend the Member for Kensington (Sir B. Rhys Williams) who first proposed this system of child credits as being one way of getting over this hitherto difficult problem.
The Minister said that he had a lot of explaining to do. I agree. Why is it, therefore, that he did not initiate a debate on this subject in the first place? Why did he leave it to the Opposition to arrange a debate at this late stage of planning for a new benefit before trying to clear up to the House some of the obvious confusion that exists? If the Minister thinks that there is no confusion about the Government's intentions, he must be living in a dream world.
I foresee hon. Members having a great deal of correspondance in the next few weeks as parents start receiving their child benefit books and wondering what will happen. The reasons for the confusion are obvious. First, no one will gain in terms of cash in his pocket, except the lone parents. Many people who believed that they would get a little more for their children will be disappointed. It is hardly surprising, too, that they want to know what will happen when they hear that their precious tax allowances are to be whittled away.
Explanation will also be needed about the cutting back of any other social security benefits that parents may receive now by £1 when the new child benefit has come in. Some retirement pensioners have young children and will want to know what their tax position will be under this new arrangement. Many parents are genuinely concerned.
Another issue which has not been thought through is the question of the attitude that local authorities will take in assessing income levels for purposes of free school meals, rate rebates, day nursery rates and so on. Will they take into account the fact that an individual's actual income is no higher although his taxable income has been increased? People will need to be reassured that there will not be an automatic change in assessment that will take them out of these local authority benefits. These are


some areas in which confusion reigns. Several constituents have asked me for explanations, and I think that all hon. Members will soon be getting such requests.
There should also be some explanation about the case of the single-parent family. I understand that such families will be entitled to a continuation of their child interim benefit of £1·50 for the first child after 1st April, which means that they will be getting a higher child benefit for the first child than two-parent families would get. But then we learn that this is only an interim measure which it is intended to phase out. The Chief Secretary to the Treasury said on 16th November:
This is not intended to be a permanent feature, and they will be put on the same footing as other families as soon as that is practicable."—[Official Report, 16th November 1976; Vol. 919, c. 504.]
What does that last phrase mean? Is it just a few weeks before the extra £26 a year received by single-parent families will be phased out? I believe that it should not be phased out at all. Many of us have pleaded for the single-parent family in this context. Child benefit is more valuable to such one-parent families, which generally suffer more from poverty. I hope that the Government will have second thoughts and retain the extra £26.
The Secretary of State has many questions to answer if the scheme is to be understood. As others have said, it is important that the new Child Benefit Scheme is accepted because it is the right way to go ahead in helping to overcome family poverty.

6.16 p.m.

Mrs. Audrey Wise: I have been a little sceptical about the Opposition's plans since, on the last occasion we debated this subject, they explained how they would work out a scheme which would cost less but give everyone more, but their audacity today is positively breathtaking. We have heard complaints about the poverty trap and the proliferation of means-tested benefits, with the resulting confusion. Yet it was the Conservatives who were the architects of the poverty trap, with the introduction of family income supplement. It was they who supervised the proliferation of means-tested benefits.
Before I was a Member of this House, my hon. Friend the Member for Oldham, West (Mr. Meacher) put down many Questions to bring out the enormity of the complex means-tested benefits that the Tories were introducing.

Mrs. Lynda Chalker: The record needs to be put straight. When my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) introduced FIS in 1971, it was as a temporary measure while work was being done on the full tax credit proposals. They were put forward in the Green Paper in 1972, which was considered later. Before either the hon. Lady or I came to the House, that was there to alleviate a special problem which was growing up at the time. There was every intention that it should be taken over by a much fairer proposal, and the hon. Lady knows it.

Mrs. Wise: It was there as part of the Tories' much-vaunted intention to direct help where they considered that it was needed. That intention may be laudable, but it constantly produces the confusion of means-tested benefits of which the Conservatives now complain. It is quite incompatible to say at one and the same time that money should go where it is needed but that help should be given to middle management and those who lose because their high incomes attract higher rates of tax.
We have heard a great deal today about students. That is surprising. I have marched with students and spoken in Trafalgar Square for students, and on those occasions Conservative Members have been conspicuous by their absence. The problem for students is a real one, but it is not intimately connected with child benefit. The question is one of student grants, and in the case of discretionary grants it is a question of public expenditure, which the Conservatives constantly say should be reduced.
The move from a discretionary grants system to a much more extended mandatory system is being hamstrung by the cuts introduced by our Government—and it would be even more hamstrung by the havoc that would be wrought if we had a Tory Government. That has nothing to do with child benefit. Students are not children, and it is time we got away from this view of them. We must recognise them as adults with a right to an income


and should not regard them as adjuncts of their parents.

Mr. Newton: I agree with what the hon. Lady is saying on this point, but surely the scheme will make matters worse. Does she believe that what is happening is correct? If not, would she like to see something done about it?

Mrs. Wise: I certainly want to see something done about discretionary grants. I want to see the Opposition muting their constant calls for cuts in public expenditure and coming to grips with reality and the need for the improvement of discretionary grants.
We have heard a great deal about the difficulties of take-up. It is a new benefit, and I am puzzled why the Government did not introduce the benefit on the basis of tax returns. I do not see why a universal benefit has to be applied for.
The Opposition make a great deal of fuss about the take-up situation, but they must be aware that only 72 per cent. of those eligible take up the supplementary benefit to which they are entitled. They should remember this when they are making so much noise on the subject. If the Opposition feel so strongly about these matters, they should make a strong plea for a debate on why those who are entitled to supplementary benefit are not claiming it. Instead, the Opposition appear to take the view that many of those who are receiving benefit are nothing but lazy layabouts.
Some Opposition Members have again suggested that short-term benefits should be taxed and that the unemployed are better off than people who are at work. However, an examination of the official statistics shows that in 1975 a married couple with two children received after tax a figure of £45·72 when at work and £30·65 when unemployed or sick, including earnings-related supplement. How does that figure prove the point that the unemployed are better off? I suggest that it is an Opposition smokescreen to give the impression that they want to distribute largesse but that they will use fairy money without requiring payments from anyone.
I appreciate that genuine criticisms can be made of the system, questions can be asked about it and warnings

sounded. My right hon. Friend is well aware that much of the trouble that has plagued us arose from the fact that the Chancellor of the Exchequer in his last Budget pre-empted the introduction of the Child Benefit Scheme by increasing child tax allowances. He spent £300 million on family support, apparently without consulting the responsible Department. He went about it in a way that made things infinitely more difficult.
The Chancellor had before him certain alternatives. For example, he could have increased family allowances to £2·68 at no greater cost than £300 million. He could have increased family allowances to a lesser figure because at that time they did not cover the first child and he could have increased the child tax allowance only for that child. However, he chose not to do that, and considerable embarrassment was caused to his colleagues on the Front and Back Benches. I urge my right hon. Friends to do their utmost to see that this does not happen again and to see that the money allocated to family support in future Budgets is concentrated on the Child Benefit Scheme.
We are informed that it is impossible to make any quck change in arrangements which have already been made. I believe that the Government fall into a trap which to some extent is of their own making or the making of the Civil Service. I still remain unconvinced that it is impossible to say that an order book token with a face value of £1·50 shall from a particular date be given the value of £2. Civil servants managed to cope with the complexity of the rationing system, and surely they should be able to undertake the kind of exercise which I have suggested in relation to the uprating of benefits.
An arrangement which would be relatively simple and cheap would be to provide the post office counter clerk with a rubber stamp with which to stamp the order book token with the additional value when it was handed over. It would certainly result in a great saving of administrative effort. I hope that my right hon. Friend will listen sceptically to the dreary tales of administrative difficulty which he probably hears day after day. The suggestion which I have advanced about the stamping of additional benefits would be one attempt to


break through the alleged administrative problems.
If it is found to be impossible to bring in such a breath of bracing fresh air in a matter of two or three months, perhaps my right hon. Friend could look at the magic month of November when so many other upratings take place. Could he not tell the Chancellor that it would be a good idea if he were to make money available for family support by uprating child benefits in November? That surely is not impossible, and it would go a great part of the way to impove the Government's standing in these matters. It would also remove from the Opposition the opportunity to throw out yet another smokescreen.
I hope that my right hon. Friend will examine these suggestions. There is no doubt that those with small children, especially when the mother is not employed, are hard pressed financially, and it is extremely important to take action to relieve family poverty. Only a Labour Government are likely to do anything to relieve family poverty. We earnestly believe that that is the case, and may I, please—please—ask my right hon. Friends to prove us right.

6.28 p.m.

Mr. Peter Bottomley: I enjoyed the speech made by the hon. Member for Coventry, South-West (Mrs. Wise), although I did not agree with the first three-quarters of her speech or with its concluding sentence. I agreed with her suggestion about stamping the order books. However, the hon. Lady went somewhat astray on other matters. She must know that in the last two and a half years more people have come on to means-tested benefits than at any other time in our history. One cannot lay that at the door of the excesses of previous Governments.
The hon. Lady also referred to the possible havoc that would be created if a Tory Government were to come to power. She must not forget the havoc that has been created by the Labour Government in terms of inflation, the fall in the value of the pound, and unemployment.
I shall take a very short time indeed in which to make two important points. A great deal of advice on the social wage, if I may use the Government's language,

comes from the TUC and CBI. A recent ministerial reply sought to make the point that both organisations represent many families, but we must appreciate that households with two people at work are represented by two voices in the TUC. However, the household with a single parent who is not in employment probably has no voice at all. Furthermore, even if a parent is able to work, he or she is usually unable to attend union meetings and will be unable to make his or her voice heard.
The second thing is that we will never solve our means-tested problems until we have a high level of child benefit, especially for the first child. Some people say that we cannot afford this. If we give a child benefit of £5 a week to a child for 20 years, when that child grows up he wil pay tax at a rate of £10 a week, at current rates, for 40 years. There is no way in which the country cannot afford that.

6.31 p.m.

Mrs. Lynda Chalker: This short debate has told us, although the Minister tried to deny it, that there is a considerable amount of confusion within the House and outside about the introduction of the Child Benefit Scheme. I have heard from all sides and from all parts of the country that people do not understand what is happening. My right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) went to some lengths to explain why this was so.
No one is in doubt that a proper child credit scheme is needed. I stick by what we have always said: that this would have been the first part of a Conservative tax credit scheme. The one thing we need above all is a simpler form of family support, as was so amply illustrated by my hon. Friend the Member for Woolwich, West (Mr. Bottomley).
It is 47 years since Lord Keynes said that family allowances and child tax allowances should be amalgamated. Command Paper No. 5116, printed in 1972, contained proposals for a tax credit system. There, we said that the system should be more readily comprehensible than at present so that low income families could understand without difficulty the help to which they were entitled. Even though there may be disagreement in detail about tax credit schemes, there is


all-party agreement that we need a simplified scheme. We know of the Labour Party's commitment to child credits; we know of other party commitments from both 1974 General Elections, but we are four and a half years on since that 1972 Green Paper.
We have had the earnest efforts of the right hon. Member for Blackburn (Mrs. Castle), the probing of my right hon. Friend the Member for Wanstead and Woodford, the unrelenting pressure and determination by my hon. Friend the Member for Rushcliffe (Mr. Clarke) and further determined efforts by my hon. Friend the Member for Ealing, Acton (Sir G. Young) to get the details out and to push ahead with the scheme for child benefits. At the end of it all, however, it is a sad story that we stand here today with an appalling muddle concerning the people who operate the system because they are beset by continual changes.
The result is that the scheme is being brought into disrepute before it has begun. The reason is that the Treasury was so busy interfering in other sectors of our nation that it failed to work with and to allow the Secretary of State for Social Services to produce an adequate comprehensible working scheme, as he would genuinely wish to do. The interrelationships are now too complicated. We should be helping the poor large families. About 750,000 children are still beset by the complications of the changes we have had for the last six months.
It was only this week that Dr. Wilfred Beckerman, of Balliol College, Oxford, in evidence to the Royal Commission on Distribution of Income and Wealth, said:
In spite of a rapid increase in some forms of public expenditure, the proportion of people below the poverty line has not fallen significantly.
In an answer to a question of mine, the Minister of State said that at the end of December 1975 there were 90,000 working families subject to a 75 per cent. rate of marginal taxation, compared with 60,000 in December 1974. Although this is subject to much error, the trend is and has been consistently upwards and is continuing in that direction.
Both sides of the House accept the need to concentrate resources on those in

real need, the poorest in the community. The Government have succeeded in making this scheme so complicated and confused that there is now not only a problem of take-up in some quarters but of sheer understanding, even in this House.
I could go on to say many other things, but there has been excuse after excuse. In 1975 the problems of high alumina cement at Dusham House in Washington were the reason for delay as explained by the right hon. Member for Blackburn. But 1976 was even more disastrous than the year in which the Child Benefit Act received Royal Assent. We had the rumblings of the effects of Government pay policy last spring. I could go through all the horrors of the summer of 1976, when the Minister announced that he could not introduce the full scheme. His scheme was described by the right hon. Member for Blackburn as an abandonment of one of the Labour Party's major reform, a new system of family support. I do not think that the right hon. Lady dissents from that today. She is as sad as anyone that the scheme was not implemented. I regret that she is not here. [Interruption.] She has been unrelenting in her efforts to try to persuade the right hon. Gentleman and his friends, particularly in the Treasury, to do better than to believe in this scheme.
We have heard about the saga of wasted paper or printed paper—I see that the Minister sighs. I shall not go into it again, except to say that the Minister said first of all that the benefits would be tax-free and would not be means-tested. A couple of months later he said that they would not be tax-free but would be taxed like FAM. CTAs were not to be reduced or withdrawn. This is confusing for the average British man or woman in the street. [Interruption.] It is incredible that the first information slip should be later withdrawn. 9bout 14 million slips had been printed before the Secretary of State's next correction on 23rd September. Only 6 million of these were printed. We wonder what the recipients of 7 million of the CH1(T) original forms were doing without the proper correction slip. There is a severe discrepancy in the figures.
We understand that the Government have had problems, but they have not


helped themselves out of the confusion by any of the steps taken. It would have been better to pause and get the scheme correct before making further announcements.
The chink of light really came on 16th November with the Chief Secretary's statement about what was to happen to the child tax allowances. We were delighted to see that. But even in the leaflet produced by the Inland Revenue as a result of that announcement there had to be an item 7 at the end of the leaflet. This said that any references to child benefit deduction and child benefit on the notice of coding with which it was sent out were to be ignored.
So be it. The Government were trying to get it right, but the last paragraph of the leaflet had to put something right in another that went in the same envelope to so many people across the country. There are a lot of people still in doubt and there are a lot of others who have not read the small print of the announcement which they received from the Minister of State on 28th January. Some people hope that he will clarify further, because there is a lot which is unclear. We know that he is doing his best, but it does not help people to calculate what will happen unless he can be more specific in the second part of the leaflet where he talks about its being impossible, without disproportionate expense, to eliminate the possibility of any loss in respect of means-tested benefits. He goes on to say that the free school meals and appropriate part of the child benefit will be disregarded. He makes a number of very open-ended commitments. They are very welcome because he is trying to sort out the confusion. Can we have a final statement about the effect of the poverty trap which results from means-tested benefits which cannot be fully offset by those who take up child benefit?
In addition to the leaflet saga, we had the problem of the low take-up. The Minister tried to dismiss this earlier. I checked in Hansard some figures which he gave when he said that only 83 per cent. of those eligible for interim benefit applied for the benefit. That was not as good as he wanted, but it was not too bad a figure.
In reply to my Question tabled the other day, the right hon. Gentleman said that there was a 70 per cent. take-up among single-child families where that child was under eight years of age. There was a 75 per cent. take-up in families where the only child was between the ages of 8 and 12 but only a 45 per cent. take-up where the child was between the ages of 13 and 19. We have done a little research to find out what sort of families have or have not been taking up this benefit. What worries us most gravely is that those who are not taking up the benefit are the ones who need it most. It is the families for whom the transfer from wallet to purse was truly designed who need to improve their take-up. We must examine other ways of getting this through to women—not just to their men-folk. Further, we must find ways of doing this other than through post offices.
With this low take-up—the figure is about 1 million—

Mr. Orme: It is 600,000.

Mrs. Chalker: The Minister of State is now giving us a lower figure. He did not give it earlier.

Mr. Orme: I did.

Mrs. Chalker: I do not believe that the right hon. Gentleman gave it, but we shall be able to check Hansard tomorrow to make sure. There are families who are only just realising that they are about to lose their child tax allowances. If nothing else comes out of this debate other than the message that child tax allowances are on their way out—that there is to be a phased withdrawal over the years, with different categories for different groups and that everyone should claim child benefit—we shall have done something worth while which may improve take-up of child benefit.
My right hon. Friend the Member for Wanstead and Woodford has referred to many problems. One to which he did not refer concerns the number of families who did not claim family allowance and who are not used to making regular weekly trips to a post office. Such people will want to have the child benefit paid, perhaps on a monthly or quarterly basis, through a bank. I hope that the Minister will examine this, because it could facilitate


some of his Department's paper work and save administrative costs.
There are other problems, which worried the hon. Members for Gravesend (Mr. Ovenden) and Dunbartonshire, East (Mrs. Bain), concerning widows. The situation is fully spelt out, or as fully as any of these decisions are spelt out, in the Chief Secretary's statement of 16th November. It is clear that the Secretary of State has taken up the worries about widows being worse off as a result of these developments and has done something about it. There can be no doubt that there are still a number of misunderstandings.
I must tell the hon. Member for Dunbartonshire, East that she is misunderstanding the situation a little. She voted with us in June of last year when my right hon. Friend the Member for Wanstead and Woodford set out the various ways of improving child benefit levels. The hon. Lady voted with us and now has said that she did not think such a scheme was on. She must look at her own voting record before she tells us that we have got it wrong.
The crunch situation will arise in respect of local authority rate and rent rebates. Many people came off long term supplementary benefit because of the confusion and went on to rate and rent rebates. They may now find themselves in a position when they would be better off if they did not receive such rebates but instead claimed child benefit and supplementary benefit. But if they go back to supplementary benefit they return to the short-term level of £3 or more less than the level they would have been on earlier. There are other regulations which might be enacted to put this right.
As child tax allowances come down, will all the other means-tested benefits, rates and entitlements be altered? At present, what is puzzling people who are working to help families who so badly need help is whether it is better to go for one thing rather than the other.
My right hon. Friend the Member for Wanstead and Woodford asked the Minister three questions which he failed to answer. He asked about students, especially about those with no discretionary grants, and about the child who

was considered to be a first child for child benefit purposes and a second child for the purposes of the child tax allowance. I hope that the Secretary of State will deal with these points.
There can be no doubt that hon. Members on both sides have shown that there has been utter confusion over this issue. The phasing-in over three years has nothing to do with the needs of poor families. It has everything to do with the need of the present Government to totter along, playing lackey to the TUC.
I must remind the Secretary of State and his hon. Friends that there are two social contracts. There is not only that contract with trade union-organised labour aimed at achieving economic recovery; there is also a contract between the State and those in society who badly need support. We have had cobbled-together schemes and schemes of utter muddle together with muddled leaflets. We want an end to that. We want a proper Child Benefit Scheme and we want to see the country working towards a tax credit system which my hon. Friend the Member for Braintree (Mr. Newton) mentioned and which will give proper support without this confusion, endless spending and additional administrative cost.

6.46 p.m.

The Secretary of State for Social Services (Mr. David Ennals): I am glad that we have had this opportunity to debate such an important subject. A number of questions have been put and some powerful arguments have been used by my hon. Friends. I suppose that I was being too optimistic, when looking forward to this debate, in thinking that any credit would be given to the Government by the Opposition for our achievement in introducing child benefits in spite of the economic difficulties. I suppose that it was too much to expect a little bit of grace from the Opposition Front Bench. All that we have had has been petty, niggling, carping, party political criticism.
The statement by the Opposition that the Child Benefit Scheme is heading for the rocks can only do harm to what I believe is an important social measure. Accordingly, I wish to give one or two assurances. It was never stated by this Government, in May or at any other time, that we would abandon the full Child


Benefit Scheme. When I made my statement in May, I explained the reasons and many hon. Members on both sides of the House recognised the pay policy arguments. I never said that we were abandoning the scheme.
I was glad that we were able to make a statement in September in which we said clearly that the whole scheme would be phased in and would come in by April 1979. I give the assurance to the hon. Lady the Member for Dunbartonshire, East (Mrs. Bain) that it is a Government commitment that the full scheme will be phased in and that it will start in April. The scheme is not heading for the rocks.
My hon. Friend the Member for Coventry, South-West (Mrs. Wise) was absolutely right to say that she can look only to a Labour Government for this sort of achievement. I am prepared to take the criticism of Conservative Members on some things but certainly not on matters of social policy. Let us look at the Conservatives' record. When I ceased to be a Member of Parliament in 1970, we almost had the Crossman pension plan on the stocks. It was dropped. All that was carried into law was the attendance allowance and the invalidity pension. It needed a Labour Government to be returned to power to bring in a proper piece of pensions legislation—as well as all of what we have done to help the disabled.
Let us look at the question of child support. The last time the Conservatives came to power, they did so on a promise to increase family allowances. They had four years when they did not increase those allowances. The Labour Government came to office saying that we would introduce a new system of child cash allowances for every child, including the first, payable to the mother. That is exactly what we shall have done as from April of this year. It is the first step in April, but it is the first step in a major social reform. Conservative Members always come up with their tax credit proposals as if they are somehow a total panacea. Opposition Members ask us why we do not do more. This comes from a party which urges us to cut back even further on public expenditure.
The hon. Member for Wallasey (Mrs. Chalker) asked why we are not introducing a tax credit scheme. On my latest

estimate, the cost of introducing a tax credit scheme in 1977 would be about £5,000 million. If the Opposition thought that such a scheme was so important, they had four years of office in which they could have introduced it, but they did not do so. Why, therefore, should we believe that they would do it now? In any case, the wisdom of doing so does not seem to be accepted by all Conservatives.
The Young Conservatives, in their recent pamphlet "A Credit to Us All", suggested certain weaknesses of the tax credit Green Paper. They said that it failed to state its clear priorities and that it did not eliminate the need for a complicated social benefit system. They suggested that it had not been properly thought out in its financing. They concluded:
The seemingly overwhelming desire to achieve one tax rate and one rate of credit for most people irrespective of income appears to be the only clearly expressed priority.

Mr. Patrick Jenkin: What the authors of that pamphlet, like many other people, have failed to understand is that the Green Paper stated clearly that the figures were put in for purely illustrative purposes. The Select Committee fully understood that even if the right hon. Gentleman does not.

Mr. Ennals: Very well. That may he so, but I have produced a conclusion as to what those figures, illustrative as they might be, would cost.

Mrs. Wise: Would my right hon. Friend confirm that, apart from many ill-thought-out and complicated schemes put forward by the Conservative Party, Conservative Governments have not put a penny on family allowances, which were introduced by a Labour Government and have been increased only by succeeding Labour Governments?

Mr. Ennals: Exactly. The Conservatives did not increase allowances in their four years of office between 1970 and 1974. Nor did they do so in their previous term. I am prepared to accept Opposition criticism on many issues, but not on this one. Labour Governments have a solid record of steady achievement in many sectors compared with the virtual void in the record of the Opposition.
The right hon. Member for Wanstead and Woodford (Mr. Jenkin) and the hon.


Member for Wallasey went on and on about leaflets. We had to produce a supplementary information sheet when it was concluded that we could not introduce the whole scheme at once in April 1977. That sheet had to be replaced when we decided last September that the scheme would be phased in over three years and that the benefit would be tax-free. Now, the Opposition say that we should have postponed the scheme for a whole year. I do not believe that those who will receive the benefit will think that. I think we are entitled to point out to those who will receive the additional benefit from April that the Opposition would not have introduced it in full.
This change did not detract from the main purpose of the leaflet, which was to get the families with one child to apply for child benefit. My hon. Friend the Member for Coventry, South-West asked why it could not be paid automatically, using tax returns. But we do not have a full record of one-child families. Tax returns could not be used because many people do not make them annually, and the person entitled to child benefit is not always the person who gets the tax allowance. It is not possible to do it in the way suggested by my hon. Friend.
Much has been said about the difficulties in the post offices. There are 24,000 post offices, some of them very small. Some of them did not have the leaflets at the time. If we had limited distribution to the major post offices, it would have made things more difficult for claimants. The main question is whether people are applying for the benefit to which they are entitled. More of them are doing so now, and that was the whole purpose of the leaflet. There is a 90 per cent. take-up of child benefit, which is significantly higher than the take-up of the family income supplement over the years since it was introduced by the Conservative Government. But about 800,000 people could still apply. I do not know where the hon. Lady gets her information that it is largely the poor families which have not applied, because that is not my impression.
Again, about 300,000 families have a child who is leaving school perhaps in May or at about that time but who

would be entitled to benefit until then. Clearly, such families would get only a small benefit for one or two months, and many of them might not bother to apply. We shall not have a complete take-up. My impression is that many others who have not applied are higher earners who will apply as soon as they get advice from their tax advisers. They will not suffer if they have not made their application before April.
I assure the hon. Lady that, through the publicity that is continuing this month and which will lead up to April, we expect a substantial increase in applications. One of the advantages of a debate like this is that it will, I hope, gain publicity. I hope that all those who are entitled to claim child benefit will do so in the next three months.
The hon. Lady asked about payment through the banks. On 25th January, in a Written Answer, my right hon. Friend the Minister for Social Security said that the Government were bearing in mind the possibility of payment direct to bank accounts but that it would have to come at a later stage. There are complications in introducing such a scheme. This has been an enormous operation, carried out in Washington and Newcastle.
My hon. Friend the Member for Barking (Miss Richardson) asked reasonably, why there had to be two books for a one-parent family. She also asked why both Blackpool and Newcastle were involved. There has been plenty of contact between the two. When we came to introduce the child interim benefit, it was possible in the time available only by using both Blackpool and Newcastle. It could not have been done otherwise without an increase in staff. Because of the pressure at Newcastle, it had to be done at Blackpool as well. As soon as the new computer system comes into use the two offices will come together. Meanwhile they will keep in close contact. Eventually the systems will be merged and operated from one office.
I was asked why the increased benefit could not be paid by the post office clerks rubber-stamping order books. That device would not work for the only child, who would not have a book to himself. Technically, there are also problems of fraud.
I was also asked about the students' position. Regulations to exclude students on advanced courses will be laid before


the House in due course, but I cannot give an exact date. Nor can I at this stage add to what my right hon. Friend the Chief Secretary to the Treasury said in his statement on 16th November. I can, however, say that talk by the right hon. Member for Wanstead and Woodford about people losing hundreds of pounds is nonsense. Even for a man on an income of £21,000 a year upwards, paying 83 per cent. tax, the reduction in tax allowance for the first child would cost him only £86 a year. What the right hon. Gentleman said was, therefore, a gross exaggeration.

Mr. Patrick Jenkin: But the people who do not get the grant, and who, therefore, will have no mechanism for replacing the value of the tax allowance, will be losing. Can the right hon. Gentleman say something about that?

Mr. Ennals: I do not know whether the right hon. Gentleman is asking for a special child tax allowance or what proposal he is putting. He said the scheme is complicated. Presumably he is seeking to make it more complicated.
Several hon. Members referred to FIS and the effect of child benefit upon FIS. There has obviously been some uncertainty about this. This was reflected in an article in New Society only last week. I would repeat and make clear that our proposal for FIS will mean that no family will lose FIS or have the amount of FIS reduced. In fact, a family with more than one child, and lone parents with one child who have been receiving child interim benefit, will gain on the basis of our FIS-child benefit proposals. I am sorry that there has been some misunderstanding about this.
The right hon. Member for Wanstead and Woodford said that higher-rate taxpayers would lose. There was a great deal of exaggeration, but that, fortunately, was dealt with by my right hon. Friend the Chief Secretary. The number of highrate taxpayers for whom the loss of child tax allowance may not be fully matched by child benefit may be about 300,000

—that is, those paying 55 per cent. up-wards. But the losses do not start to exceed 50p a week until the 70 per cent. marginal rate is reached. The maximum loss for an 83 per cent. marginal rate taxpayer with two children is no more than £1·23 a week. That is a small sum.
The Opposition's carping attitude in this debate does them no credit at all. They have shown very little appreciation of the importance of what this Government have achieved with regard to child benefit. For years, people concerned with child poverty have campaigned for a new benefit and form of child support. They argued that family allowances were not paid for the first child, even though in many respects the first child was the most expensive to keep. The campaigners complained that child tax allowance should go to help those who were too poor to pay tax and to those who most needed help. They argued the case for a benefit paid directly to the mother as the one who is the most responsible for paying for a child. They argued the case for a tax-free benefit.
All these are done in the Child Benefit Scheme to be initiated in April this year. It is being introduced at a time of great economic stress. Suggestions from the Opposition that we ought to be spending more money, or doing it in a different way, are ones that I cannot accept. Of course a scheme such as this has problems. There will be difficulties and developing problems. I believe, however, that all of us can feel a sense of pride that in April the Child Benefit Scheme will begin. All of us must accept that child benefit is the main way of relieving family poverty.
I assure my hon. Friends that I want to see a higher rate of child benefit. Although I cannot give an assurance about what the Government will do next year, the year after or the year after that, I can say that we as Ministers are committed to the scheme and its social benefit. In so far as funds can be made available in times of economic stress, they will be. That is the pledge I give in launching the Child Benefit Scheme.

Question put, That this House do now adjourn:—

The House divided: Ayes 271, Noes 278.

Division No. 62.]
AYES
[7.4p.m.


Adley, Robert
Gardiner, George (Reigate)
Maxwell-Hyslop, Robin


Aitken, Jonathan
Gardner, Edward (S Fylde)
Mayhew, Patrick


Alison, Michael
Gilmour, Rt Hon Ian (Chesham)
Meyer, Sir Anthony


Amery, Rt Hon Julian
Gilmour, Sir John (East Fife)
Miller, Hal (Bromsgrove)


Arnold, Tom
Glyn, Dr Alan
Mills, Peter


Atkins, Rt Hon H. (Spelthorne)
Godber, Rt Hon Joseph
Miscampbell, Norman


Awdry, Daniel
Goodhew, Victor
Mitchell, David (Basingstoke)


Bain, Mrs Margaret
Goodlad, Alastair
Moate, Roger


Baker, Kenneth
Gorst, John
Monro, Hector


Banks, Robert
Gow, Ian (Eastbourne)
Montgomery, Fergus


Beith, A. J.
Gower, Sir Raymond (Barry)
Moore, John (Croydon C)


Bell, Ronald
Grant, Anthony (Harrow C)
More, Jasper (Ludlow)


Bennett, Dr Reginald (Fareham)
Grieve, Percy
Morgan-Giles, Rear-Admiral


Benyon, W.
Griffiths, Eldon
Morris, Michael (Northampton S)


Berry, Hon Anthony
Grimond, Rt Hon J.
Morrison, Charles (Devizes)


Biffen, John
Grist, Ian
Morrison, Hon Peter (Chester)


Biggs-Davison, John
Grylls, Michael
Mudd, David


Blaker, Peter
Hall, Sir John
Nelson, Anthony


Body, Richard
Hall-Davis, A.G.F.
Neubert, Michael


Boscawen, Hon Robert
Hamilton, Michael (Salisbury)
Newton, Tony


Bottomley, Peter
Hampson, Dr Keith
Nott, John


Bowden, A. (Brighton, Kemptown)
Hannam, John
Onslow, Cranley


Boyson, Dr Rhodes (Brent)
Harvie Anderson, Rt Hon Miss
Oppenheim, Mrs Sally


Braine, Sir Bernard
Hastings, Stephen
Page, John (Harrow West)


Brittan, Leon
Havers, Sir Michael
Page, Rt Hon R. Graham(Crosby)


Brocklebank-Fowler, C.
Hayhoe, Barney
Page, Richard (Workington)


Brotherton, Michael
Heath, Rt Hon Edward
Pardoe, John


Brown, Sir Edward (Bath)
Henderson, Douglas
Parkinson, Cecil


Bryan, Sir Paul
Heseltine, Michael
Pattie, Geoffrey


Buchanan-Smith, Alick
Hicks, Robert
Penhaligon, David


Buck, Antony
Higgins, Terence L.
Percival, Ian


Budgen, Nick
Hodgson, Robin
Peyton, Rt Hon John


Bulmer, Esmond
Holland, Philip
Pink, R. Bonner


Burden, F.A.
Hooson, Emlyn
Price, David (Eastleigh)


Butler, Adam (Bosworth)
Hordern, Peter
prior, Rt Hon James


Carlisle, Mark
Howe, Rt Hon Sir Geoffrey
Pym, Rt Hon Francis


Carson, John
Howell, David (Guildford)
Raison, Timothy


Chalker, Mrs Lynda
Howells, Geraint (Cardigan)
Rathbone, Tim


Channon, Paul
Hunt, David (Wirral)
Rawlinson, Rt Hon Sir Peter


Churchill, W.S.
Hunt, John (Bromley)
Rees, Peter (Dover &amp; Deal)


Clark, Alan (Plymouth, Sutton)
Hurd, Douglas
Rees-Davies, W. R.


Clark, William (Croydon S)
Hutchison, Michael Clark
Reid, George


Clarke, Kenneth (Rushcliffe)
Irving, Charles (Cheltenham)
Renton, Rt Hon Sir D. (Hunts)


Cockcroft, John
James, David
Renton, Tim (Mid-Sussex)


Cooke, Robert (Bristol W)
Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)
Rhodes James, R.


Cope, John
Johnson Smith, G. (E Grinstead)
Ridley, Hon Nicholas


Cordle, John H.
Jones, Arthur (Daventry)
Ridsdale, Julian


Cormack, Patrick
Jopling, Michael
Rifkind, Malcolm


Corrie, John
Joseph, Rt Hon Sir Keith
Rippon, Rt Hon Geoffrey


Costain, A.P.
Kaberry, Sir Donald
Roberts, Wyn (Conway)


Critchley, Julian
King, Evelyn (South Dorset)
Rodgers, Sir John (Sevenoaks)


Crouch, David
Knight, Mrs Jill
Ross, Stephen (Isle of Wight)


Crowder, F. P.
Knox, David
Rossi, Hugh (Hornsey)


Davies, Rt Hon J. (Knutsford)
Lamont, Norman
Rost, peter (SE Derbyshire)


Dean, Paul (N Somerset)
Langford-Holt, Sir John
Royle, Sir Anthony


Dodsworth, Geoffrey
Latham, Michael (Melton)
Sainsbury, Tim


Douglas-Hamilton, Lord James
Lawrence, Ivan
st. John-Stevas, Norman


Drayson, Burnaby
Lawson, Nigel
Scott, Nicholas


du Cann, Rt Hon Edward
Lester, Jim (Beeston)
Shaw, Giles (pudsey)


Durant, Tony
Lewis, Kenneth (Rutland)
Shelton, William (Streatham)


Eden, Rt Hn Sir John
Lloyd, Ian
Shepherd, Colin


Edwards, Nicholas (Pembroke)
Loveridge, John
Shersby, Michael


Emery, Peter
Luce, Richard
Silvester, Fred


Evans, Gwynfor (Carmarthen)
McAdden, Sir Stephen
Sims, Roger


Eyre, Reginald
MacCormick, Iain
Sinclair, Sir George


Fairbairn, Nicholas
McCrindle, Robert
Skeet, T. H. H.


Fairgrieve, Russell
Macfarlane, Nell
Smith, Cyril(Rochdale)


Farr, John
MacGregor, John
Smith, Dudley (Warwick)


Fell, Anthony
Macmillan, Rt Hon M. (Farnham)
Speed, Keith


Fisher, Sir Nigel
McNair-Wilson, M. (Newbury)
Spence, John


Fletcher-Cooke, Charles
McNair-Wilson, P. (New Forest)
Spicer, Michael (S Worcester)


Fookes, Miss Janet
Madel, David
Sproat, Iain


Forman, Nigel
Marshall, Michael (Arundel)
Stainton, Keith


Fowler, Norman (Sutton C'f'd)
Marten, Neil
Stanbrook, Ivor


Fox, Marcus
Mates, Michael
Stanley, John


Fraser, Rt Hon H. (Stafford &amp; St)
Mather, Carol
Steel, Rt Hon David


Freud, Clement
Maude, Angus
Steen, Anthony (Wavertree)


Fry, Peter
Maudling, Rt Hon Reginald
Stewart, Rt Hon Donald


Galbraith, Hon T. G. D.
Mawby, Ray
Stewart, Ian (Hitchin)




Stokes, John
Trotter, Neville
Whitelaw, Rt Hon William


Stradling Thomas, J.
van Straubenzee, W. R.
Wiggin, Jerry


Tapsell, Peter
Vaughan, Dr Gerard
Wigley, Dafydd


Taylor, R. (Croydon NW)
Viggers, Peter
Wilson, Gordon (Dundee E)


Taylor, Teddy (Cathcart)
Wakeham, John
Winterton, Nicholas


Tebbit, Norman
Walder, David (Clitheroe)
Wood, Rt Hon Richard


Temple-Morris, Peter
Walker, Rt Hon P. (Worcester)
Young, Sir G. (Ealing, Acton)


Thatcher, Rt Hon Margaret
Wall, Patrick
Younger, Hon George


Thomas, Dafydd (Merioneth)
Walters, Dennis



Thomas, Rt Hon P. (Hendon S)
Watt, Hamish
TELLERS FOR THE AYES:


Thompson, George
Weatherill, Bernard
Mr. Spencer Le Marchant and


Thorpe, Rt Hon Jeremy (N Devon)
Wells, John
Mr. Michael Roberts


Townsend, Cyril D.
Welsh, Andrew





NOES


Abse Leo
Dunn, James A.
Kinnock, Neil


Allaun Frank
Dunnett, Jack
Lambie, David


Anderson, Donald
Eadie, Alex
Lamborn, Harry


Archer Peter
Edge, Geoff
Lamond, James


Armstrong Ernest
Edwards, Robert (Wolv SE)
Latham, Arthur (Paddington)


Ashley Jack
Ellis, John (Brigg &amp; Scun)
Leadbitter, Ted


Ashton Joe
English, Michael
Lee, John


Atkins, Ronald (Preston N)
Ennals, David
Lestor, Miss Joan (Eton &amp; Slough)


Atkinson Norman
Evans, Fred (Caerphilly)
Lever, Rt Hon Harold


Barnett, Guy (Greenwich)
Evans, loan (Aberdare)
Lewis, Ron (Carlisle)


Barnett, Rt Hon Joel (Heywood)
Ewing, Harry (Stirling)
Lipton, Marcus


Bates, Alf
Faulds, Andrew
Litterisk, Tom


Bean, R. E.
Fernyhough, Rt Hon E.
Lomas, Kenneth


Benn, Rt Hon Anthony Wedgwood
Fitch, Alan (Wigan)
Loyden, Eddie


Bennett, Andrew (Stockport N)
Fitt, Gerard (Belfast W)
Luard, Evan


Bidwell Sydney
Flannery, Martin
Lyon, Alexander (York)


Bishop E. S.
Fletcher, Ted (Darlington)
Lyons, Edward (Bradford W)


Blenkinsop, Arthur
Foot, Rt Hon Michael
Mabon, Rt Hon Dr J. Dickson


Boardman, H.
Ford, Ben
Mc Cartney, Hugh


Booth, Rt Hon Albert
Forrester, John
Mc Donald, Dr Oonagh


Bottomley, Rt Hon Arthur
Fowler, Gerald (The Wrekin)
Mc Elhone, Frank


Boyden, James (Bish Auck)
Fraser, John (Lambeth, N'w'd)
MacFarquhar, Roderick


Bradley, Tom
Freeson, Reginald
McGuire, Michael (Ince)


Bray Dr Jeremy
Garrett, John (Norwich S)
MacKenzie, Gregor


Brown Hugh D. (Provan)
Garrett, W. E. (Wallsend)
Mackintosh, John P.


Brown, Robert C. (Newcastle W)
George, Bruce
Maclennan, Robert


Brown Ronald (Hackney S)
Gilbert, Dr John
McMillan, Tom (Glasgow C)


Buchan, Norman
Ginsburg, David
McNamara, Kevin


Buchanan, Richard
Golding, John
Madden, Max


Butler, Mrs Joyce (Wood Green)
Gould, Bryan
Magee, Bryan


Callaghan, Rt Hon J. (Cardiff SE)
Gourlay, Harry
Mahon, Simon


Callaghan, Jim (Middleton &amp; P)
Graham, Ted
Mallalieu, J. P. W.


Campbell Ian
Grant, George (Morpeth)
Marks, Kenneth


Canavan, Dennis
Grocott, Bruce
Marshall, Dr Edmund (Goole)


Cant, R. B.
Hardy, Peter
Marshall, Jim (Leicester S)


Carmichael, Neil
Harrison, Walter (Wakefleld)
Mason, Rt Hon Roy


Carter, Ray
Hart, Rt Hon Judith
Maynard, Miss Joan


Carter-Jones, Lewis
Hattersley, Rt Hon Roy
Meacher, Michael


Cartwright, John
Hayman, Mrs Helene
Mellish, Rt Hon Robert


Castle, Rt Hon Barbara
Healey, Rt Hon Denis
Mendelson, John


Clemitson Ivor
Heffer, Eric S.
Mikardo, Ian


Cocks, Rt Hon Michael
Hooley, Frank
Millan, Rt Hon Bruce


Cohen Stanley
Horam, John
Moonman, Eric


Coleman, Donald
Howell, Rt Hon Denis (B'ham, Sm H)
Morris, Alfred (Wythenshawe)


Colquhoun, Ms Maureen
Hoyle, Doug (Nelson)
Morris, Charles R. (Openshaw)


Cook Robin F. (Edin C)
Huckfield, Les
Morris, Rt Hon J. (Aberavon)


Corbett, Robin
Hughes, Rt Hon C. (Anglesey)
Moyle, Roland


Cowans Harry
Hughes, Robert (Aberdeen N)
Mulley, Rt Hon Frederick


Cox, Thomas (Tooting)
Hughes, Roy (Newport)
Murray, Rt Hon Ronald King


Craigen, Jim (Maryhill)
Hunter, Adam
Newens, Stanley


Crawshaw, Richard
Irvine, Rt Hon Sir A. (Edge Hill)
Noble, Mike


Cronin, John
Irving, Rt Hon S. (Dartford)
O'Halloran, Michael


Crosland, Rt Hon Anthony
Jackson, Colin (Brighouse)
Orbach, Maurice


Crowther Stan (Rotherham)
Jackson, Miss Margaret (Lincoln)
Orme, Rt Hon Stanley


Cryer, Bob
Janner, Greville
Ovenden, John


Cunningham, G. (Islington S)
Jay, Rt Hon Douglas
Owen, Rt Hon Dr David


Cunningham, Dr J. (Whiteh)
Jeger, Mrs Lena
Padley, Walter


Davidson, Arthur
Jenkins, Hugh (Putney)
Paisley, Rev Ian


Davies, Bryan (Enfield N)
John, Brynmor
Palmer, Arthur


Davies, Denzil (Llanelli)
Johnson, James (Hull West)
Park, George


Davies, Ifor (Gower)
Johnson, Walter (Derby S)
Parker, John


Davis, Clinton (Hackney C)
Jones, Alec (Rhondda)
parry, Robert


Dean, Joseph (Leeds West)
Jones, Barry (East Flint)
Pavitt, Laurie


Dell, Rt Hon Edmund
Jones, Dan (Burnley)
Pendry, Tom


Dempsey, James
Judd, Frank
Perry, Ernest


Doig, Peter
Kaufman, Gerald
Prentice, Rt Hon Reg


Dormand, J. D.
Kelley, Richard
Price, C. (Lewisham W)


Douglas-Mann, Bruce
Kerr, Russell
Price, William (Rugby)


Duffy. A. E. P.
Kilroy-Silk, Robert
Radice, Giles







Rees, Rt Hon Merlyn (Leeds S)
Spearing, Nigel
Watkinson, John


Richardson, Miss Jo
Spriggs, Leslie
Weetch, Ken


Roberts, Albert (Normanton)
Stallard, A. W.
Weitzman, David


Roberts, Gwllym (Cannock)
Stewart, Rt Hon M. (Fulham)
Wellbeloved, James


Robinson, Geoffrey
Stoddart, David
White, Frank R. (Bury)


Roderick, Caerwyn
Stott, Roger
White, James (Pollok)


Rodgers, George (Chorley)
Strang, Gavin
Whitehead, Phillip


Rodgers, Rt Hon William
Strauss, Rt Hon G. R.
Whitlock, William


Rooker, J. W.
Summerskill, Hon Dr Shirley
Willey, Rt Hon Frederick


Rose, Paul B.
Swain, Thomas
Williams, Rt Hon Alan (Swansea W)


Ross, Rt Hon W. (Kilmarnock)
Taylor, Mrs Ann (Bolton W)
Williams, Alan Lee (Hornch'ch)


Rowlands, Ted
Thomas, Jeffrey (Abertillery)
Williams, Rt Hon Shirley (Hertford)


Ryman, John
Thomas, Mike (Newcastle E)
Williams, Sir Thomas (Warrington)


Sandelson, Neville
Thomas, Ron (Bristol NW)
Wilson, Alexander (Hamilton)


Sedgemore, Brian
Thorne, Stan (Preston South)
Wilson, William (Coventry SE)


Selby, Harry
Tierney, Sydney
Wise, Mrs Audrey


Shaw, Arnold (Ilford South)
Tinn, James
Woodall, Alec


Sheldon, Rt Hon Robert
Torney, Tom
Woof, Robert


Shore, Rt Hon Peter
Tuck, Raphael
Wrigglesworth, Ian


Short, Mrs Renee (Wolv NE)
Urwin, T. W.
Young, David (Bolton E)


Silverman, Julius
Varley, Rt Hon Eric G.



Skinner, Dennis
Wainwright, Edwin (Dearne V)
TELLERS FOR THE NOES:


Small, William
Walker, Terry (Kingswood)
Mr. Joseph Harper and


Smith, John (N Lanarkshire)
Ward, Michael
Mr. James Hamilton.


Snape, Peter
Watkins, David

Question accordingly negatived.

Orders of the Day — SELF-EMPLOYED PERSONS (TAX EXEMPTION CERTIFICATES)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Frank R. White.]

7.18 p.m.

Mr. Nicholas Ridley: I must first declare an interest as a director of a building firm, not, I think, connected with the subject matter of this debate, which is the issue of 714 certificates to self-employed subcontractors and other sub-contractors so that they may be paid gross rather than have 35 per cent. deducted from what they receive.
I want to make it clear at the beginning that we on the Conservative Benches do not condone tax evasion. [Interruption.] We do not want to help it. We are happy to find ways of stopping it up. Indeed, this scheme derives from a scheme introduced by my right hon. Friends a few years ago, and designed for the same purpose. We agree that that scheme had loopholes. It is not part of our case that tax evasion should be made easier.
But, before examining what has happened under the scheme, I should like to ask why these Draconian measures to enforce tax respectability should be concentrated upon one group of people—the builders. It seems as thought they have been singled out. I do not think that they are the only people who are paid gross and practise a certain amount of

tax evasion. I should not mind seeing a scheme of 714 certificates for accountants. The Chief Secretary will soon be back at work. Why should he not have the same treatment meted out to him?
The builders themselves will be able to remember the words of the Minister of State, Department of Defence—the hon. Member for Dudley, East (Dr. Gilbert)—when he was Financial Secretary to the Treasury, when he said in Committee on the Finance Bill:
When people see one man get away with it and possibly boasting of doing so, people may think 'If he can get away with it, why should not I?'."—[0fficial Report, 10th June 1975; Vol. 893, c. 352.]
That was what the hon. Member for Dudley, East said in his inimitable English, and it is what the builders will be saying about a lot of other professions as a result of this scheme.
The first point that I want to establish is that this scheme has become a licence to work. The 35 per cent. deduction leaves an inadequate amount to the individual. Basically, there are two classes of people who may be receiving only 65 per cent. if they are refused a certificate. The first class is the individual who works on his own and who, if he does not obtain a certificate, will be paid net. He will not be paying tax at 35 per cent., because he will have personal allowances, child allowances and allowances for expenses, so that in the first place he is being made to pay more tax through the deduction scheme than he would probably be liable to otherwise. It is crippling for him, because he cannot


afford to live on 65 per cent., and if he does not get a certificate he is very likely to go out of business.
The matter is much more anomalous in the case of companies. The 35 per cent. deduction makes no sense in relation to a company. It may be a very big company, employing 1,000 people, or it may be a small company employing 10. I do not know how a company can be expected to pay 65 per cent. of what it is owed and also pay taxes, wages, office expenses and the rest, including paying for materials, paying national insurance contributions and all its outgoings, and survive. No company of any size—in other words, any company that employs more than a couple of men—will be able to survive the refusal of a 714 certificate unless it has substantial capital resources to tide it over until it receives the tax back.
Further, although the Government propose that the absence of the 714 certificate should not prevent Government agencies and local authorities giving work to sub-contractors, their publicity on this point has not been very good. There is a circular—I am grateful to the Under-Secretary of State for the Environment for sending me a copy this morning—and I shall he quoting from it so that it is widely understood that local authorities are not under an obligation not to ask people without a certificate to tender.
The circular states that
there may be excellent contractors who, for one reason or another, prefer to meet their tax liability by having it deducted at source. A certificate is not a 'work permit' and is no indication of reliability of workmanship or financial stability.
Therefore, the many local authorities that are already saying that they will not give contracts to people who do not have certificates have no reason for saying it. I hope that the Government will give much publicity to that.
Furthermore, the Property Services Agency has been suggesting that it will not employ non-certificated sub-contractors. The Under-Secretary of State for the Environment wrote to me to say that the
PSA will normally employ only firms who have a certificate or who can otherwise satisfy the Agency that they are not likely to evade payment of tax.
That statement is not clear enough. The same instruction should go to the PSA

as goes to local authorities. In no sense should the possession or lack of a certificate influence the placing of a contract.
The effect of refusal of certificates on firms or individuals can be very serious. I am satisfied that in 90 per cent. of cases it means that they will go out of business. When we are taking a power as Draconian as this, albeit in pursuit of stopping a tax evasion device, we have a great responsibility to make sure that no one who is blameless is wrongly prevented from working. [Interruption.] The right to work is something that even the hon. Member for Birmingham, Perry Barr (Mr. Rooker), who makes interjections from a seated position, ought to pretend to defend.
The first ground for refusal of a certificate is that one does not have third party insurance to the value of £250,000. There have been a few refusals on that ground. The second requirement is that one must have a bank account. Thanks to the work of the excellent organisation called "Fight the 714 Campaign", we now have details of many hundreds of cases of people who have been refused 714 certificates. I shall read some of these cases to the House, because Labour Members ought to know what their Government are doing through the tax inspectorate. First, I shall give one example of someone who has been refused a certificate under the bank account section. I shall not give the names and addresses unless hon. Members wish me to do so. [HON. MEMBERS: "Give them".] All right. The first example is that of Mr. Christian Leng, of 26 Conway Road, London, N.15. The note I have reads as follows:
Refused because not enough money going through bank account, but he is often paid in cash. A bricklayer—self-employed 10 years—he told Revenue that the amount he had signed for on vouchers equalled his income, not amount going through his bank. He had an old certificate, and had for previous certificates declared far greater earnings than amount going through his bank.
The mere fact that a man does not put his total income through his bank does not mean that he is fiddling or not paying his tax. It is utterly wrong to take away a man's living for such a matter as that.
Next, under paragraph 1(c) of the schedule, proper records and accounts must be kept. I give two cases in this category. The first is Mr. Stephen Nye.


His accountant was struck off for professional misconduct. Unknown to him, his books were in very bad order. A new accountant has straightened them out. It is not his fault, and as soon as he found out about it he got matters put right. But what did the Revenue do?—it refused him a certificate.
The next case is that of Mr. Light, who has been a plumber for 35 years, for 20 of them self-employed. He has no tax problems. He held his present certificate from 1971 to 1975. The certificate was not renewed last year because he was behind with his book-keeping. The inspector of taxes also raised petty queries over amounts claimed for overheads. According to Mr. Light, these were amounts involving coppers. From 1975 he has had 30 per cent. deduction at source. The Inland Revenue currently owes him £603, which should have been returned by April 1976. The delay in repayment is due to his tax district; the new tax office refused to refund him the money until it received confirmation from the previous office. The tax office currently holds £2,000 of his money—that is, £603 plus deductions for the current year. All his work is for the GLC via a large contractor. It occupies him full-time, and all payments made to him are by cheque. Mr. Light has been refused a certificate.
I could give hundreds of such examples, but I shall concentrate on one or two in each category. The next ground for refusal is that the person must have been in business for three years. This is a much more sinister ground. No one can be in business for three years when he starts his working life. It means that immigrants cannot start because they cannot show three years' work experience in the United Kingdom.
Here is my first example: Mr. Hammond, of 22 Blackwood House, Collingwood Street, E.1. The note on his case reads as follows:
18 years a docker; one year self-employed. Got to have work before you get a certificate, but cannot get work without a certificate.
That is what Mr. Hammond says.
My next example is Mr. Macey, of Hilltop Court, Love Lane, Woodford Bridge, Essex—a constituent of my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin). The note

I have in his case tells me that he worked for the last three years with a limited company as a director. The company went bankrupt, and therefore he does not have a clear record although he himself owes no tax. He did not fill in the form as the local tax man laughed at him and said "You have no chance". He was laughed at, yet all he had done was to go bankrupt as a director in a company, although he himself never owed any tax. Why on earth was he picked on in that way?
Next, I have a note about a Mr. Reed, who was refused because he was not at work for one year, because he was in prison for one year. He has written to the inspector, and—so the notes reads—
he will let us know as soon as he hears from the inspector.
We now have this new ground—that a man must not have been in prison. What is wrong with helping those who have been in prison to rehabilitate themselves and get started in life again?
I turn now to a new ground, which is not even in the legislation. The schedule contains no statement that one must have a current contract, yet Mr. Faulkner, of 30 Brookfield Avenue, Mill Hill, was refused a certificate on this basis. He went to the tribunal and was told that in order to obtain a certificate he had to have a current contract, but that a current contract could not be obtained without a certificate. The tribunal was on his side, but it had to uphold the law. It said that between 1973 and 1975 he was not employed for a reasonable amount of time. The Inland Revenue owes him £250, and he has been unemployed for the last year.
Mr. McGullion, of 62 Monkleigh Road, Morden, has five years' records, but he was refused and told that he had to have two current contracts. Where in the legislation does it say that? These people can perfectly well have no work between one contract ending and another starting.
These ridiculous reasons are preventing people from setting up in business. In 50 years' time there will be no labour only sub-contractors. No one will be able to start, because no one will have three years' experience behind him. This is one condition that we want to change.
The main stumbling block occurs when people have tax irregularities behind


them. This is quite clear, and the Financial Secretary has never tried to disguise it. He has always admitted that if someone is a bad taxpayer he will not get a certificate. But why introduce this new idea of a man having to be a good taxpayer before he can get a certificate to work? This does not apply to anyone other han the self-employed. Large numbers of people have been caught evading tax and have been taken to court and fined. But this has not prevented them from working. Even the offence of being late with tax payments and incurring interest has been cause for the refusal of a certificate.
Mr. Gore, of 12 Boyton Close, Hornsey, was refused a certificate. He was a shop-fitter for 30 years and he owned a company from 1960 to 1971. He owes nothing, but the Inland Revenue keeps sending him large assessments. He was refused a certificate because he has not paid the large assessments.
Mr. Barton, of 45 Freedom Street, Battersea, was refused a certificate. He had clear tax for six years, but he tailed to pay his tax properly in 1970. He appealed, but this was not accepted, and he was told to re-apply in 12 months. 1970 is more than six years ago. Is it true that irregularities of many years back will be held against a person retrospectively, even though at that time the legislation was not in force?
The arbitrary way in which the inspectors behave is totally unjustifiable in a free country. There are many instances of inspectors not giving reasons at all. Mr. Green, of Mansford Street, London, E.2, was refused the certificate three months ago. The inspector said that he was not obliged to give reasons for the refusal. Mr. Green owes no tax, he has insurance, and has never been self-employed.
Mr. Maisey, of Cranford, Middlesex, has been self-employed for eight years. He had a difficult first year, but has been all right ever since. He was refused a certificate for no reason. He was turned down about eight months ago and is only just appealing now.
Very often those who are refused are small people who do not understand the processes of law, and perhaps are not particularly clever at book-keeping. It is absolutely monstrous that on the fiat of a tax inspector they can be denied their

living. If a certificate is refused, one can appeal to the commissioners within 30 days. But the commissioners cannot hear a case when the inspector says that the certificate was refused because of tax irregularities. The commissioners cannot question that. They are in no position to find against tax inspectors if they have refused a certificate on that basis. Against this, there is no effective appeal whatsoever.
A tax inspector who dislikes someone or who is totally unreasonable can easily tell the commissioners that he is not prepared to discuss the matter, because the reason for refusal concerns tax irregularities. That means that the man's livelihood is effectively doomed. That cannot be right. I question whether it is right for the commissioners to hear appeals at all. They decide on the niceties of tax claims or whether the defence of a taxpayer is sound in law. Now they are being asked to adjudicate on whether a man's licence to work should be taken away. It would be much better if these cases could go to some other sort of court. It would be more reasonable if the full circumstances were brought out into the open and the inspector was made to justify himself.
Until the Government do something about this highly inefficient and deficient appeals procedure the only proper appeal court is this House. That is why I ask the Financial Secretary to stay a little later tonight to discuss a specific case that I shall raise on the Adjournment. I hope that he gets four or five of these cases a week from now on, because there is no other way in which these people can appeal. Justice must be seen to be done before we can ask people to accept the thoroughly arbitrary nature of this legislation.
Of course the Government have ulterior motives in mind. They are anti-lump. Hon. Gentleman who sit below the Gangway on the Government side, and who are melting away fast tonight, have it in mind to destroy labour-only sub-contracting. They want to bring in legislation to extend direct labour, and they are delighted by the way in which this piece of legislation is being implemented. That was indicated by their cheers and jeers at the beginning of my speech. They would rather see these hard-working citizens on the dole. No wonder our unemployment figures are going up.
The applications for 714 certificates totalled 277,000 in January. Of that number, 23,000 have been refused and 55,000 have not even had an answer. The scheme is due to come into effect on 6th April, and 55,000 firms and people do not know whether they can continue in business in six weeks' time. Another 23,000 know definitely that they cannot go on. Some of these employ a number of people—they are sizeable companies, and the distress and concern being caused by this is totally unacceptable. I appeal to the Government to do one meaningful thing at least tonight—to declare a moratorium on the operation of the scheme until these applications have been dealt with, and the points that I have raised tonight have been adequately put right. This affects nearly 80,000 people. It is not possible for them to go into the next trading year without knowing whether they will be able to get a certificate. The absence of a certificate denies the bulk of them the ability to carry on earning their living.
I beg the Government to take this seriously and come forward with a solution. I urge them to deal with the un-necessary grounds for refusal, the arbitrary and dictatorial powers given to the inspectors, the lack of a right to appeal, and the administrative failure that has led the Government to the point where, with only six weeks to go, 55,000 people have not had an answer, on which their living will depend. If the Government care about ordinary working people they will act now.

7.40 p.m.

Mr. Paul Dean: I am glad to speak after my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley), who put forward a moving and powerful case. It is clear from what he said that we are talking not only about the 714 tax certificate but about the whole attitude of the Government towards self-employment. It is understandable that the self-employed are suspicious that the Government are hostile to them and that the Government regard them as the awkward squad who do not fit in with Socialist planning and who do not like conforming and being forced into a mould. These are people who prefer the small unit, people who do not like paper work and bureaucracy.

Indeed, they are the people in the community who like doing their own thing and being their own boss.
Surely we should be encouraging rather than hounding this sturdy independence which has been a British characteristic throughout the ages and which is a vital buttress for freedom in this country. We need the drive of the man who stakes his savings in his own business. We need the small enterprise, not only for the sake of our economic health but to maintain freedom and the British way of life.
It is hardly surprising that the building and construction industry in particular should feel suspicious about the Government's intentions. After all, that industry realises that the Government are pledged to nationalisation of the industry. We do not know when that will happen or which firms will be involved, but we know that the commitment is there in the background. We know, too, that through the operation of the closed shop and the so-called voluntary register it is becoming increasingly difficult for small builders to get public contracts. They understandably see this system as a deliberate squeeze on their livelihoods. They remember, too, the Government's proposals to extend the power of local authority direct labour organisations.
In this connection, many small builders have read what was said in Labour's "Programme for Britain", published in May 1976. That document stated:
We believe that a major public stake must be created within the building and construction industry. In part this need can be met by considerably expanding the use of efficient direct labour organisations, the resources of which should be developed and exploited across a much wider front.
Quite rightly, they see all these things as the thin end of a political wedge. This, then, is the background of the controversy over the 714 tax certificates.
Is it any wonder that organisations such as the National Federation of Self-employed and the Association of Self-employed People regard this primarily as a political rather than a fiscal device? Let me quote how this was put in a recent letter from the NFSE. The letter reads:
Whereas this Federation certainly does not condone tax evasion, we sincerely believe that the regulations and conditions, laid down in Schedule 12 of the Act, penalise the law-abiding majority of sub-contractors and that


this legislation has been enacted for political as opposed to fiscal considerations. We believe that this legislation may result in eliminating the entire self-employed sector of the construction industry.
Can one wonder that the national federation should feel that way? Is it any wonder, that the "Fight the 714" campaign has been born?
Here again I quote briefly from a document, this time by the campaign. It says:
The '714' is part of a campaign by the unions and Socialists to get control of our largest and most successful free enterprise industry. The '714' will kill off the small private builder; nationalisation will take care of the larger firms.
These are understandable fears which have been created as a result of the deliberate policy of the Government. They are the background to the suspicions which have been aroused.
In the earlier part of his speech, my hon. Friend the Member for Cirencester and Tewkesbury asked whether this was a tax collection instrument, as was originally intended, or whether it had now become a passport to work. That is a very good question. The Financial Secretary has made it clear throughout that it is only a tax collection instrument. Perhaps I should quote what he said. This is his most recent pronouncement on the matter and was given in a parliamentary answer to me. He said:
The certificate, I repeat, is not a certificate to work. Income tax can be deducted at source if such a person is unable to obtain a certificate. He is still able to earn his livelihood in just the same way."—[Official Report, 11th November 1976; Vol. 918, c. 650.]
But what is happening? The Property Services Agency, which is responsible for construction for the Government, announced that it would generally consider tenders only from contractors who held a current valid tax certificate at the time of tender. That is completely contrary to the clear pledge given by the Financial Secretary. It clearly shows that in the mind of the PSA, at that time at any rate, was the intention that the certificate should be used, no doubt for reasons of convenience, as a passport to work and not merely as a tax collection instrument.
There have been various letters and arrangements and various statements by Ministers to try to explain this apparent conflict. We have had no satisfactory

explanation yet, and we are bound to ask, not only in the case of the PSA but in the case of the local authorities, by what right they can pick and choose in this way. What authority have they so to broaden the intentions of the Government and the intentions of the legislation?
I submit to the Financial Secretary that what is now happening in practice is contrary to the original intention and to the clear pledge given by the right hon. Gentleman in this House. We are dealing here with the abuse of a scheme which has gone far wider than was originally intended. Had the House of Commons had any intention at that time of expanding and using the scheme in this way, I do not believe that it would have accepted the Bill for one moment. The legislation simply would not have been passed.
That is one very good reason among others for the plea advanced by my hon. Friend the Member for Cirencester and Tewkesbury for a moratorium on the scheme until these matters are sorted out. Almost 23,000 certificates have been refused, and my hon. Friend has shown examples of many that have been turned down for no good cause. With the best will in the world, the individuals concerned could not have complied with the requirements. They are being denied the right to work for no adequate reasons and for reasons that are far outside the original intentions of the legislation.
I reinforce the appeal to the Financial Secretary which has been made by my hon. Friend the Member for Circencester and Tewkesbury. The Minister now has sufficient evidence to show clearly that the operation of the scheme is causing hardship and injustice and is adding to the roll of unemployment. The only thing to do now is to withdraw the scheme until these arrangements are sorted out and to introduce something else that will he more satisfactory.

7.51 p.m.

Mr. James Dempsey: Before I ask my right hon. Friend to consider a matter that is related to the problem that we are discussing, I declare that I am not an opponent of the self-employed. The Opposition have given the impression that everyone who occupies the Labour Benches is such an opponent. We all know that without the


self-employed providing the services that they now provide production not only in the craft and construction industries but even in distribution would be the poorer. That must be accepted, and that is something that I have always understood.
In my constituency there are a number of self-employed persons who employ quite a few other persons. They make a fair contribution to employment in the constituency—and I happen to represent an area of high unemployment. I make it clear that I am not an opponent of self-employment. I am not unfriendly towards them. Indeed, the converse is the truth. I am rather friendly towards such individuals.
I paid close attention to what was said by the hon. Member for Cirencester and Tewkesbury (Mr. Ridley). The hon. Gentleman quoted a number of cases that must be examined. But the anomalies did not first crop up this year or the year before; there were just as many anomalies in the days of the Conservative Government in the operation of Inland Revenue certificates of all sorts. I wonder why the Conservative Administration did not do something about them. [HON. MEMBERS: "They did."] Obviously they did not do very much. If they had done more we should not be faced with this problem.
I ask the House to consider the position of a young fellow who enters business as a self-employed person. He might enter self-employment as a craftsman. I am talking of a young person who has worked with his hands all his life. He is the sort of person who is not aware of all the book-keeping requirements of running a small business. He knows nothing of administration matters. He has not sufficient work in hand, or has not worked long enough, to accumulate sufficient resources to employ a clerk or some such person to look after the administration of the business.
Such a person might fail to answer income tax queries. He might even fail to submit his application within the prescribed 30 days to appeal against a decision to withdraw or to cancel the 714 certificate. Here we have a young person who continues to overlook such matters due to his lack of administrative experience and book-keeping knowledge until

he finds himself making application to the inspector and the inspector applying the law of the country. In fact, he applies the Act of Parliament.
It is wrong to condemn the income tax inspectors as they are only doing their job. They are implementing the regulations that we lay down. We should be criticising ourselves, not the inspectors, who are only enforcing the regulations laid down by Parliament.
In the case I have in mind, the inspector enforced the regulations and the young person concerned has been disallowed for three years. Why should that young chap have to wait three years before his case can be reviewed? Why cannot it be reviewed within one year? Why cannot disallowance be for one year only, review taking place when that period has elapsed?
I spent a long time in the licensing courts in my local authority days. If we had withdrawn a licence from someone for three years there would have been hell to pay, not only in my constituency but throughout Scotland. In the case to which I have referred an innocent young fellow, totally inoffensive, who does not have book-keeping knowledge but who has worked all his life as a craftsman, has had his certificate cancelled and has been advised that he cannot possibly have it reviewed until three years have elapsed. That is a long period for a young person. I am not talking about monopoly imperialists or monopoly owners. I am talking of ordinary working-class chaps who have decided to set up a small business to see whether they can make better progress in life.
I am anxious to ascertain why such people should be subject to the mandatory period of three years of disallowance. Have any representations been made to my right hon. and hon. Friends to reconsider the sentence that is imposed on the innocent person who wants to try his luck—this is all that he is doing—as a self-employed person? All that these people can be accused of is trying their luck. Arising from their inexperience of accounting requirements of a small business, no matter how small it is, they sometimes run into difficulties. I regard the disallowance penalty of three years as too severe.
I do not care which Government are in power. Surely the Minister who is responsible should examine this matter. I am sure that the disallowance of three years has been in operation for a number of years. I am sure that it was in operation during the days of the Conservative Government. No matter what Government were in power when this period of disqualification was introduced, I say in all sincerity that it is too long. I ask my right hon. Friend to consider this aspect. I hope that I shall learn from him if he or the Treasury have any ideas or intentions in this respect and whether there is any prospect of the period of suspension being reduced to about a year, which in my view would be more reasonable.

7.59 p.m.

Mr. Geraint Howells: So far, it seems that Members on both sides of the House are in favour of safeguarding the interests of the self-employed. Having been a self-employed person all my life, I declare my interest. Further, I am a member of the National Federation of Self-employed. I feel proud to be a member of that organisation.
It gives me great pleasure to follow the hon. Members for Cirencester and Tewkesbury (Mr. Ridley) and Somerset, North (Mr. Dean). I agree entirely with the sentiments which they expressed. I hold the view that one of the greatest dangers that we face is the constant erosion of freedom by the imposition of rules and regulations that are of no very obvious benefit to the community. The compulsory 714 certificate for the self-employed is a clear example of that and is a flagrant infringement of personal liberty. In that reason, I feel it my duty as a Liberal to oppose the regulation and ask the Government to think again. I see this primarily not as an attempt to prevent tax evasion, as is claimed, but as another attack on the self-employed.
For some time I have felt that the self-employed are under siege and are well on the way to becoming second-class citizens. Their energy and enthusiasm are no longer encouraged but are being strictly curtailed by petty legislation. I believe that the self-employed are an important section of the community with a vital part to play in its economy.
Likewise the self-employed in the building industry, who will be affected by this strange piece of Government thinking, are essential to the well-being of that industry.
I am convinced that an enforcement of this regulation will bring about much unnecessary redundancy and that many small building firms will be made bankrupt within a short time. For a Government who pretend to show concern about the level of unemployment, they are being extremely careless about employment opportunities in this instance.
In 1971 we had the Bolton Committee's report. That Committee, which was set up to look after the interests of the self-employed, produced a very good report. In 1971 we were promised that after five years there would be an interim report by the Government. I tabled a Question asking the Government to produce that interim report on the plight of the self-employed, but they would not do so. I am sorry that the Government are not interested in the plight of the self-employed.
I represent a constituency where 31 per cent. of the electorate are self-employed. I have the largest percentage of self-employed in any constituency in the United Kingdom. The construction industry plays a major rôle in the economy of rural Cardiganshire. If this legislation is carried, it will represent a severe blow to the self-employed in the construction industry and to small businesses particularly in Mid-Wales. I am sure that that is also true of many rural parts of England and Scotland.
The construction industry employs over 1 million people. Of those, 400,000 are self-employed with probably 230,000 being labour-only sub-contractors—known as the "lump". That name came about because those people are paid lump sums rather than wages on an hourly, daily or other basis. Anyone who quotes a fixed price for doing certain work and then honours this contract works the "lump", be he consultant, architect, main contractor, sub-contractor or even labourer. In fact, this fixed price or lump sum contract is the type stipulated by central and local government in public works contracts. To date, no other system has been devised which allows the industry to operate as simply,


accurately, efficiently and competitively as it now does with labour-only sub-contractors.
The mobility of labour plays an important part in the building industry During the progress of a contract the work moves along sectionally and the trades involved live through a series of activity and redundancy cycles. When a contract comes to an end, the labour force moves on to another site. In order to keep costs down, the main contractor does not employ specialist trades in a full-time capacity. He employs them only when they are needed. The specialist tradesmen are shared by several main contractors on a sub-contracting basis.
The frequent accusation that self-employed equals the "lump" equals tax evasion is hotly disputed by Members on the Opposition side of the House, and especially by members of the National Federation of Self-employed, who claim in particular that its members are firmly based in local communities.
In 1975 the right hon. Member for Deptford (Mr. Silkin), the then Minister for Planning and Local Government, announced the creation of the Construction Industry Manpower Board to ensure
that the Government should have the benefit of regular advice from the industry about the effect of Government measures on the lump and about other measures which would increase stability of employment in the industry."—[Official Report, 15th July 1975; Vol. 895, c. 393–4.]
The TUC had much the same expectations of the board's functions. The TUC "Economic Review" 1975, Section 154, stated:
It will monitor progress under the Act and lead towards the decasualisation of the industry. From a trade union standpoint, outlining the means towards a stable labour force in construction should top the board's priorities once the lump and bogus self-employment have been eradicated.
Although the then Minister stated that both sides of the industry would be represented on the board, alas the final members did not include a representative of the self-employed contractors—clearly the most important sector as far as the board's terms of reference were concerned. The National Federation of Self-employed proposed that self-employed workers within the construction industry

must have representation on the Construction Industry Manpower Board. At present only management and unions are represented.
I could go on at length but I shall not do so. I turn briefly to the new model 715. The new model 715 is now an identity card. But even passports can be forged, as we know from experience. The new 715 is no more secure than was the original. The identity card system has brought a feeling of degradation to subcontractors. The obligation to produce the identity card to a site clerk or union official has sparked off anger which can only have serious implications. The purpose of such documents in other countries, times and places has been to regulate and control those who were considered to be of inferior or second-class citizenship status. The selection of the building trade's sub-contractor for this rôle is no accident. The building trade employs more sub-contractors than any other industry. Once this principle of apartheid is accepted here, the system will have been established and will be open to expansion. Where will it end?
I turn now to the views which have been expressed by the Wales Region National Association of Self-Employed Action Groups. It would be wrong of me as a Welshman representing a Welsh constituency not to take note of what that body has said. The association has said that the certificates
are a 'licence to trade' which may be granted or withheld entirely at the discretion of the Inland Revenue—and as such we consider this to be a new and dangerous innovation and a severe restriction on the freedom of the individual.
There is no doubt that a refusal of a 714 certificate will put contractors out of business, for the result will be that, when that builder is employed as a sub-contractor by a local authority or other main contractor, 35 per cent. will be deducted from his cheques—not 35 per cent. of profit, but 35 per cent. of gross turnover—which will put anyone out of business immediately.
An example is given by the committee which calls itself "Fight the 714". A labour-only self-employed tradesman with an employee apprentice has a total weekly income to cover wages of £80 for himself and £40 for the apprentice, making a total of £120. There is a 35 per cent. deduction on the gross amount, which totals £42. That leaves £78. If one gives £40 to the apprentice and adds on the


self-employed contribution of £5·93, that leaves the tradesman with a net income of £32·70. How long can we tolerate that situation.

Mr. A. P. Costain: Has not the hon. Member overlooked the 10 per cent. maintenance retention which is kept back from the contractor?

Mr. Howells: I have overlooked many matters, but the Government have overlooked even more.
The question of appeals has been mentioned by hon. Members on both sides. The tribunal has no power to overrule the Inland Revenue and to direct that a certificate be issued. Apparently the Inland Revenue's decision on tax matters is final. Certificates are to come into effect in April, but the majority of builders have not yet obtained them. A survey by several of the large national construction companies shows that of the 7,000 sub-contractors only 400 have obtained certificates.
It is estimated that the 714 certificates will put 100,000 people out of work throughout the United Kingdom. There will also be loss of work as a result of the spin-off. It is estimated that the eventual loss to the Exchequer will be colossal and far in excess of the £10 million that the Government claim they will lose because of the "lump".
I have come to a definite conclusion—as have many others—that the Government are yet again giving way to pressure from the trade unions. The hidden purpose is obvious. It is to please trade unionists who wish to see the building industry completely unionised. Once again the individual is disregarded, the small man is regimented against his will and 1984 is coming even nearer. We must end this tide. We could start by throwing out the regulations. My colleagues and I will support their rejection.

8.15 p.m.

Mr. John Wakeham: I shall deal with only one aspect of the scheme, but it is the central aspect—the reduction of tax evasion. We have been told by the Financial Secretary that about £10 million is involved. He gave no evidence to support that estimate, but for the purpose of the argument I am happy to accept that

figure. It is a significant sum, but it must be kept in perspective.
There are about 360,000 certificate holders and the £10 million estimate is presumably based on that figure. If one assumes that the certificate holder is a person earning average wages and has two children, the amount of revenue involved is about £230 million a year—and that is assuming that the certificate holders have no employees at all. The Government must know that certificate holders have a considerable number of employees. I have not been able to acquire an accurate estimate of the number of employees, but the best estimate is that on average there are about three employees for each certificate holder.
If one takes that figure with roughly the same level of income and therefore the same level of taxation, one is talking in terms of £1,000 million of revenue per year. I suggest that the figure involved is between £230,000 million and £1,000 million. Therefore, the £10 million that we are considering is between 4 per cent. and 1 per cent. of the revenue that comes from this class of employment throughout the country.
Frankly, I do not believe that the Inland Revenue is able to estimate the likely income sufficiently accurately to give me confidence that the £10 million is a genuinely considered figure. One is bound to conclude that the reasons for the regulations are not entirely those of tackling tax evasion. The reasons probably stem more from a hostility to the "lump" and the self-employed than from a straightforward desire to prevent tax evasion.
We have had no evidence of the additional costs of dealing with these certificates. The cost to the taxpayer is more than £25 per taxpayer per year and the Revenue costs cannot be much less than that. The total costs involved in dealing with the problem of tax evasion are divided half between the Revenue and half between the taxpayer, and are likely to be about twice the amount of tax that is supposed to be being evaded. Thus, the cost of this extra bureacracy must be more than the cost of the lost revenue. The Inland Revenue is receiving virtually nothing out of the scheme.
If we are to attempt to deal with tax evasion—and everyone wants a successful way of doing that—we must not set up


tax evasion systems that will cost more to collect than the amount of revenue lost. It is not as if the previous scheme worked that badly. In a Written Answer on 10th May 1976 the Financial Secretary told one of his hon. Friends the number of prosecutions of sub-contractors under the exemption certificate scheme. The original scheme was introduced in 1971, and in 1972–73 there were two successful prosecutions. That number built up steadily over the next four years until, in 1975–76, there were 99 successful prosecutions. That is a substantial increase.
One must examine the figures carefully, because, as anyone who has been involved in advising people knows—and I used to be involved as a chartered accountant—for every tax case that results in a successful prosecution by the Inland Revenue a considerable number are settled by payment of back tax, by penalties and the like. I estimate that in the normal run of tax cases, of failure to declare tax and back taxes having to be paid, there are about five cases in which the matter is settled with penalties and interest as compared with every prosecution. If one then looks at the prosecution figures and says to oneself "There were probably five cases that the Inland Revenue dealt with successfully without taking them to the courts, as compared with every prosecution", one gets a very substantial increase by multiplying by a factor of six. For the years that I have given we find that from about 12 cases in 1972–73, 600 cases in 1975–76 are probably dealt with satisfactorily. On that basis, therefore, it does not seem to me that the previous legislation was working so badly, obviously starting from a very low point.
It is also important to stress, when looking at the success or failure of the previous system, that cases involving tax arrears, back duty inquiries and prosecutions take quite a considerable time before they come to the courts. Therefore, the figures that we were looking at although the cases of successful prosecutions for the five years up to 1976, were probably dealing only with the cases for the first or second year, or perhaps the third year, because there were many more cases having to be dealt with no doubt after the end of 1976 dealing with the tax affairs of taxpayers for the previous year.
Therefore, being as charitable to the Government as one can be, I am bound to say that I am quite unconvinced that on the straight case of tax evasion, this scheme has been shown, on the evidence so far, to be cost-effective in any form. It is costing far more in expenses of the Inland Revenue and of the taxpayers than is being paid.
I believe that the Government have severely overlooked the previous scheme, which was making a substantial inroad into this problem. They would have done better to have modified the previous scheme in the light of experience, rather than to scrap that scheme and bring in this new scheme, which will have all the side effects that have been mentioned in the debate unless the Government do something about it. The self-employed in Britain will take more notice of what the Government do in this matter than they will of any pious words from the Prime Minister about trying to support the self-employed.

8.22 p.m.

Mr. J. W. Rooker: At one point this evining I thought that I would probably be the only defender of the Government on the Labour Benches. I was a sort of left-over from the previous Division. I thought that I would await with interest the speech of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), who is expert in these matters. Looking at the Order Paper over the last few months, I have noticed that he has done his best to raise this issue in the ways that are open to hon. Members. He read out a list of addresses and individual cases. Not for a moment do I believe that all those people are criminals, nor do I believe that there can be justification, perhaps, for their not getting their certificates. Certainly the appeal procedure ought to be examined.
I agree with the hon. Member for Cirencester and Tewkesbury about questioning the income tax commissioners. As we all remember, Mr. Poulson was an income tax commissioner. If nothing else, that should cast a slur over the rest of them.

Mr. Andrew Welsh: Will the hon. Gentleman give way?

Mr. Rooker: No, I have only just risen to speak. The hon. Gentleman will have a chance to make his own speech later.
Hon. Members have a duty to take up the cases of their constituents who fall foul of the regulations—these or any others, for that matter, irrespective of whether they are self-employed. I have done that for self-employed builders in my constituency. I have made representations to the Inland Revenue and have had the cases dealt with. There has been no problem. I have no complaint to make to my right hon. Friend the Minister. I am sure he will be pleased to hear that.
However, in listening to some Opposition Members one would think that no certificates had been issued. I understand that about 270,000 certificates have already been issued.

Mr. Nicholas Winterton: Only 277,570 applications have so far been received.

Mr. Rooker: The hon. Gentleman has the exact figure. Clearly some certificates have been issued. It is not as though at the start of the new tax year the construction industry will fall flat on its face because building will stop straight away. However, there are plenty of reasons why the Government introduced the regulations.
Opposition Members who dismiss tax evasion by saying that it is only 4 per cent., it is not important and it is not worth the cost of collection should look more closely at the aspects of tax evasion. The Tory Governments that we have had have not been very expert at passing Finance Bills which contain no loopholes for those who wish to avoid or evade taxes. Only this afternoon I have been reading the words of the hon. Member for Cirencester and Tewkesbury, in a Standing Committee dealing with the first Finance Bill of 1975 on the matter of the Income and Corporation Taxes Act 1970, when the Government proposed to strengthen part of that Act. The hon. Gentleman was saying, on 29th January 1975, that Government should not tighten up tax loopholes and that he did not believe in the Government policing their tax legislation. That is on record as being said in Standing Committee two years ago.
Clearly, I understand the hon. Gentleman's annoyance at the Government's wishing to tighten up further loopholes that have been discovered in Tory legislation of 1971. Obviously Opposition Members are very annoyed about that. The last thing they would expect a Labour Government to do would be to tighten up loopholes in tax legislation. It is all to the credit of my right hon. and hon. Friends on the Treasury Bench that over the last two years, although they have not shouted about it, they have deliberately sought to tighten up loopholes in tax legislation. This is only one example. There are other examples in tax legislation, such as the artificial transfer prices of multinational companies.
When Labour Governments tighten up tax legislation to ensure that we do not have a great army of scroungers who avoid paying their tax and who are abusing the Welfare State just as much as anyone else who avoids any other payment or abuses any other part of welfare, it is very significant that in a three-hour debate, which is largely based on the Government's attempts to tighten up on tax evasion, we do not hear the muck-raker from Aberdeen, South pontificating on the Opposition Benches about people abusing the Welfare State and benefits. Not for one moment would I condone that, but it is exactly the same situation.

Mr. Deputy Speaker (Mr. Oscar Murton): Order. Although the hon. Gentleman did not use what is ordinarily an unparliamentary expression, he should not refer to an hon. Member in the way in which he did.

Mr. Rooker: I only wish that the hon. Member for Aberdeen, South (Mr. Sproat) were present, Mr. Deputy Speaker, so that he could liven up the debate. It would be very interesting to listen to the hon. Gentleman defending tax evasion by the labour-only sub-contractors in the building industry.

Mr. Costain: rose—

Mr. Rooker: I do not wish to give way. The hon. Gentleman will no doubt make a speech. I bow to his great and detailed knowledge of the building industry. Time is short, and it is best that he makes his own speech.
It is part and parcel of the same operation—the raising of revenue and the spending of revenue. It is legitimate for the Government to seek to close every possible loophole. In my opinion they have not closed enough of them. This is one of two or three attempts that the Government have made to deal with this problem. Contrary to what has been said, there is plenty of evidence of widespread tax evasion of income tax and capital gains tax, and millions of pounds are outstanding under the old surtax legislation.
There is a breed of accountants who, because the Government wish to tighten up on tax evasion, are making a lucrative living on the side by informing companies and individuals how to avoid and evade paying taxes. I hear someone say that there is a difference. I accept that there is a difference between tax avoidance and tax evasion.
We have arrived at the point at which Mr. I. Stitt, a senior partner in the firm of Arthur Anderson, leading accountants, is running courses on how to avoid and evade paying tax. The course notes say:
You should seek deliberately to play off the Inland Revenue against other Government Departments such as the Price Commission, the Department of Health and Social Security and other Government Departments, including Customs and Excise",
and others, which implies that they should not truthfully answer questions they are asked. That advice is to be found in the notes for a course run by a respectable senior accountant who goes round the country telling firms and individuals how to avoid and evade paying their rightful dues to society.

Mr. Peter Rees: rose—

Mr. Rooker: I shall not give way.

Mr. Peter Rees: rose—

Mr. Deputy Speaker (Sir Myer Galpern): Order. If the hon. Member who has the Floor does not give way, the hon. and learned Member must resume his seat.

Mr. Rooker: The hon. and learned Gentleman can make his own speech. I do not intend to give way to him. I do

not expect him to agree with what I am saying. I do not expect him to like what I am saying. The fact is that there are people such as Mr. Stitt who are developing a nice little racket because my Government are attempting to close tax loopholes. He may be perfectly legitimately self-employed, but when the Treasury sees the course notes that Mr. Stitt is using and what he is telling people to do I think he will run a mile, or perhaps two miles. In the meantime I hope he will change some of his advice, because it must be contrary to his professional ethics. It must be wrong for a member of a professional organisation to give that sort of advice.

Mr. Nicholas Winterton: The hon. Gentleman would not say that outside.

Mr. Rooker: I have as much right to come here and make representations to the Minister about what they are doing when I criticise them as when I support them. It does not happen often enough, and I am trying to get back into the Prime Minister's good books after what he did to me two weeks ago. I resent the hon. Gentleman's remark. I have no need to make my comments other than in the House of Commons. The Lord President pontificates and says that we should use this Chamber more often. What better opportunity is there to make the comments that I have made than when we are debating a matter which involves tax scroungers and tax evaders?
My criticism does not apply to all those in the industry, but there is a criminal element that has abused the system under the 714 procedure. I hear a few gasps from Conservative Members. It has been said that there was little or no evidence of abuse under the old system. I remind the House that in September or October of last year there was a major court case in the West Midlands, in the West Bromwich-Dudley area, at which there was plenty of evidence about the criminal activities of people who were abusing the system. Several gaol sentences were handed out. If that is not evidence, I do not know what is.
The hon. Member for Cardigan (Mr. Howells) said that the tightening up of the regulations represented an erosion of freedom. I do not see how it can be


regarded as an erosion of freedom if the Government set out, quite legitimately, to see that citizens pay their rightful taxes. On the basis of past evidence, there is no doubt that a small minority has soiled the good name of many tradesmen. That is the tragedy of the situation.
I am not attacking the self-employed, who make a great contribution to every community in which they operate, be it rural or a large urban area such as that which I represent. But that is no excuse for not doing anything about this abuse and not tightening up the regulations in a way that every honest citizen will accept is fair. There should be a proper appeal procedure. There is, however, no great erosion of freedom.
I have said before in this House that I do not think it would be a bad thing to avoid all this rigamarole of income tax inspectors, social security inspectors and other inspectors who are part of the bureaucracy. We could avoid all that quite easily by making available, as they do in other countries, the tax returns submitted by everyone. All applications for any State benefit would be subject to similar treatment. Everything would be open to the public. That would ensure that all the returns were accurate, and it would be a self-regulating system.
A few of my hon. Friends do not share my views, and I suspect that that applies to many Tory Members, but the system works well in Sweden, and has done for the best part of this century. Many aspects of that system have operated there for the past 200 years. There is no personal abuse in the Press about people's private affairs, because the society does not operate like that. One does not find people such as the hon. Member for Aberdeen, South operating in Sweden. We should have everything in the open. However, I cannot rely on the fact that no hon. Members will abuse that extension of freedom when there are people like the hon. Member for Aberdeen, South.
I know that the Minister will answer all the charges of Opposition Members, concentrating most on the tax evasion aspect. We do not wish to put people out of work. I do not see that any rule which requires someone to have had a good income tax and national insurance contribution record for two years is putting

too much of a burden on him. This provision should not be a barrier to starting up in business. If it is operating as a barrier, I should be the first to say that it should not be operated so as to stop a man from starting up on his own. That would be a tragedy. [An HON. MEMBER: "But it does."] That is what we are here to debate.
If there are examples showing that the regulations need to be flexible in that respect, I would support the Minister if he says that the Treasury and the Inland Revenue will extend the flexibility. But I should not want him to seek to slacken the tightening of the screw on these tax scroungers. That is what they are—they are abusing me and my constituents, employed and unemployed. My constituents would not be happy if they realised that figures of —10 million have been quoted for tax evasion through abuse of the 714 certificates. Other estimates have ranged up to —100 million of lost taxes through the use, misuse and abuse of the 714 certificate.
I pay credit to my right hon. and hon. Friends on the Treasury Bench for once more coming along with a suggestion for blocking the loopholes which arose under Tory legislation, which I have no hesitation in saying was deliberately drafted so that there would be loopholes.

Mr. David Mitchell: Shame.

Mr. Rooker: Of course it is "Shame": I do not expect the hon. Gentleman to agree with me. It is not in the Tories' interests to have a situation in which every citizen, including the self-employed and the professions, paid every penny he owed. I should like the 714 regulations extended to many other professions. No profession would be better to start with than the legal profession. I can say this now because I have got the sack. I was always prevented before from saying much about the legal profession, which in my opinion is one of the most corrupt professions in this country in terms of abuse of the law regarding tax—next to the doctors. They, too, should have the screw turned on them by the Treasury.
If the operation of the regulations can be shown to bring in some extra millions to the Revenue which would pay for new


hospitals, better pensions and other benefits, no one on this side would oppose it. I hope that the Minister will consider extending the 714 certificate system to many other professions which seek and so achieve the avoidance and the evasion of their tax dues. That is the only aspect on which I refer to these professions. There are others, but I would not say that they were corrupt in other ways, because that could be misinterpreted. I am talking about tax-paying and tax-raising.
It ill becomes Tory Members to raise this sort of subject. It is their subject. They have chosen to spend three hours of the time of the House, in effect, debating the army of people who wish to avoid paying tax. It is a sad reflection on them. In a way, I wish that we had lost the last Division. It would have served the Tories right. But our victory has at least enabled us to hear Tory Members defending tax evasion—and that is what they are doing. They are defending scrounging on the Welfare State.
I want to know why the hon. Member for Aberdeen, South has not been present tonight. He will have some questions to answer. [An HON. MEMBER: "Where are all your hon. Friends?"] My hon. Friends have not waged a scurrilous and untrue campaign over the past months against people who cannot defend themselves. That is what the hon. Member for Aberdeen, South has done. Those people are in no position to defend themselves. On the other hand, we know that there are advocates of those who scrounge or who avoid or evade tax. We have heard something on those lines tonight. I believe that it is a thundering disgrace that the Tory Party has chosen to spend three hours debating such a topic tonight.

8.40 p.m.

Mr. Ian Gow: I understand that the hon. Member for Birmingham, Perry Barr (Mr. Rooker) is involved outside the House as a lecturer in industrial relations. I tremble to think of the consequences that would follow in industrial relations if the hon. Gentleman were taken notice of by very many people.
The hon. Gentleman was critical of my hon. Friend the Member for Aberdeen, South (Mr. Sproat), who is not present in the Chamber. I wonder whether the hon. Gentleman gave notice

to my hon. Friend that he intended to make a disgraceful attack upon him. I regard it as an abuse of the whole doctrine of privilege in this House for an hon. Member to make serious allegations, under the protection of privilege, against a senior partner in a distinguished firm of chartered accountants.

Mr. Rooker: It is true.

Mr. Gow: To seek to use that privilege for such a purpose is not following the purpose for which such a privilege was introduced.

Mr. Peter Snape: Humbug.

Mr. Gow: We believe that there is a direct connection between the way in which these regulations on the 714 certificate were drafted and the hostility of the Labour Party and the Government towards the self-employed. We believe that these regulations were made onerous partly because it is a matter of no consequence to the Labour Party if those who are engaged in the building industry in a small way go out of business. Indeed, there is ample evidence to suggest that the Labour Party is hostile to the small business man and to the man who provides the service so often demanded by the customer.
I wish to turn specifically to a matter that has not yet been raised in this debate. I refer to paragraph 15(2) of the Statutory Instrument 1960/75 which requires a photograph of an applicant applying for a 714 certificate. On 19th October last year the inspector of taxes in my constituency wrote to one of my constituents in the following terms:
Paragraph 15(2) of the Income Tax (Subcontractors in the construction industry) Regulations 1975 requires the certificate to show full-face photograph—being a true likeness of the applicant—and as the photographs supplied by you with your original application dated 24th August 1975 are not true likenesses of you at present I have no alternative but to cancel the certificate and accordingly to enable a fresh one to be produced I require a fresh photograph not larger than 63 mm by 50 mm and not smaller than 50 mm by 38 mm.
Let me tell the House what had happened to my constituent between the time when the photograph was taken and the time when the inspector wrote the letter. He had grown a moustache. That is nothing unreasonable or improper.


Indeed, it may even be that you, Mr. Deputy Speaker, have a moustache, which confirms that there is nothing improper in that.

Mr. Deputy Speaker: The hon. Member's eyesight is pretty good. Perhaps he will be glad to know that my wife does not like it.

Mr. Gow: I shall relate that observation to my constituent. I wrote to this inspector of taxes on 10th November in the following terms:
When Mr. Nishotis came to see me on Saturday, he had a moustache. When he submitted his original application to you on 24th August 1975, he had no moustache. It is possible—or even probable—that he will shave off his moustache shortly; thereafter, it is possible that he will grow it again. Such is the fashion of the age.
I would have thought that a reasonable interpretation of Regulation 15(2) would be that the full face photograph 'being a true likeness' of the applicant, means that it should be a true likeness of him at the date of the application.
If the regulation is interpreted otherwise, it could mean that a sub-contractor would be required to submit a fresh photograph every time he altered his hairstyle, or the length of his sideboards, or the amount, if any, of his moustache or beard. This would make a mockery of the regulations. It is a requirement which does not even exist in the case of a passport.
I shall refer now to the requirements for a passport. The Financial Secretary to the Treasury will know that in the case of a passport—I invite him to agree—the photograph is more important than the photograph on a 714 certificate. The Passport Office says, concerning the accuracy of the passport photograph:
It is up to the individual to decide whether the existing photograph is recognisable from the point of view of an immigration officer.
It is up to the individual to decide. I wonder whether the Financial Secretary would care to produce his passport, show it to my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) and let him decide, or let Mr. Deputy Speaker decide, whether there is a likeness between the passport photograph of the Financial Secretary and the Financial Secretary as he appears now, three years after he became a Member of this Administration.
To serve as he has done for three years under the Leader of the House and the Chancellor of the Exchequer and to have

survived intact, bearing any resemblance to his photograph taken three years ago, would be a feat that would be impossible for any Minister to achieve, notably a Minister serving in the Treasury.
Let us continue with the saga, for it is one very revealing of the extent to which the bureaucracy is leading us into a situation that would have done credit to the great inventors of nonsense. I am sure that Lewis Carroll and Edward Lear would not have believed that this could go on.
The inspector of taxes replied to my letter. I want to make clear that I am not in any way criticising the inspector in Eastbourne. It is not the bureaucrats who are to blame for these regulations. It is not their fault that they are being invited to adminster that which is ridiculous. The blame rests upon the Government. It was they who introduced the Finance (No. 2) Act 1975. It was they who introduced these regulations, and the responsibility for the regulations rests entirely with them.
I must make it clear that I make no attack upon or criticism of the staff of the Board of Inland Revenue. This is what the inspector replied, under instructions, of course, from the Board of Inland Revenue:
I share your dislike of regulations and, indeed, when the regulations concerning subcontractors appeared I think that all inspectors working in districts were somewhat aghast …Departmental instructions appear to have gone out of their way to be absolutely precise on this point and issuing inspectors have been told to only hand over the certificate if the intended recipient bears an absolute true likeness to the photograph presented.
Those were the instructions issued by the Board of Inland Revenue, for which the Financial Secretary bears special responsibility. The last paragraph of the inspector's letter of 12th November is as follows:
It is, therefore, with deep regret that on this occasion I must advise you that there is nothing further I can do in the matter unless, of course, Mr. Nishotis is prepared to present fresh photographs to me. I am sorry that I cannot be more helpful.
The inspector was sorry. The question is whether the Financial Secretary is sorry. In the presence of my right hon. Friend the Member for Crosby (Mr. Page), who am I to assert that I am fast losing my hair?

Mr. Graham Page: All the best men come out on top.

Mr. Gow: The absurdity of these regulations was brought home to me when I reflected that if I were a subcontractor in the building industry making application for a 714 certificate, a week later my appearance would be changed, of course for the worse, by the continual erosion of hair from my head. If this applies to hon. Members, does it not also apply—we must not think we are so special in this regard—to some of the citizens upon whose behalf we were sent here to speak up in the name of individual freedom and liberty against a new tyranny that emanates from the Government Front Bench?
I wrote on 15th November to the inspector of taxes:
Would you be kind enough, please, to let me have a copy of the departmental instructions to which you refer in the fourth paragraph of your letter so that I can, if appropriate, take this up with the Treasury?
I concluded:
The whole saga would do credit to the late Mr. Lewis Carroll. This is in no way to criticise district inspectors of taxes. It is to remind myself of the truth of the proposition that those whom the gods wish to destroy they first make mad.
The inspector wrote again on 17th November, as follows:
I regret that the conditions under which departmental instructions are issued to me prevent me from quoting them verbatim to you, but I do not wish to appear unhelpful nor indeed anxious to seek cover from the terms of my employment and I have therefore written to my Head Office to explore the possibility of the release of the text of the instructions to you. I trust you will hear from Somerset House or me again in the very near future.
The saga continued a month later, on 15th December, when a further letter came from the inspector of taxes in which he said, happily, that he had reconsidered the matter and that in the special circumstances of this case he was prepared to allow Mr. Nishotis himself to decide what should happen.
One last point deserves to be made. On 21st January, the inspector of taxes wrote as follows:
The Departmental Instructions concerned
—these are the words to which I draw your attention, Mr. Deputy Speaker—
(which are about 80 pages long) deal in detail with the security aspects of the new subcontractors' scheme. …My head Office

have confirmed that these instructions are for Departmental use only and I am afraid that I cannot send you a copy
Eighty pages of Departmental instructions; 80 pages designed to add to the burdens of those who are struggling to make a living in the construction industry; 80 pages that hon. Members are told they cannot see, although we are sent here to protect the people against the tyranny of the new bureaucracy.
I believe that this is a very serious matter, and I ask the Financial Secretary to place a copy of these departmental instructions, all 80 pages of them, in the Library. The refusal of the Board of Inland Revenue, under the instructions of the Financial Secretary, flies in the face of every undertaking we have had from the Government that they would try to take the people into their confidence and give us open government. I can promise the Financial Secretary that when he has put those 80 pages in the Library many of us on the Opposition Benches will go on and on, and will require further debates on this subject either Supply days or on the Adjournment.
I hope that the Financial Secretary will tell us that this kind of situation, involving a facial change in the appearance of a sub-contractor in the building industry, will not mean that such people will have to go through the whole paraphernalia and expense of having other photographs taken. I hope that he will issue a new instruction to the Board of Inland Revenue so that this kind of experience, which drives still further a wedge between people and Parliament—between the Government and the governed—will never happen again.

8.58 p.m.

Mr. Gwilym Roberts: I am sure that the hon. Member for Eastbourne (Mr. Gow) will forgive me if I do not follow him through his voluminous correspondence, but I hope that he will accept that there is on both sides of the House genuine feeling for the small business man and the sub-contractor. Many of us are aware of the considerable difficulties that sub-contractors and small businesses in general face at this time. I am sure that we would also all agree that there must be a blocking-up of loopholes that allow tax evasion.
As far as I see the certificate in its basic form, the changes are designed to


tighten the net against tax evasion. It has been suggested that £10 million in taxation is lost each year in this way, and the TUC has talked in terms of £100 million. I agree that this is a serious matter. Indeed, the problem of the building industry has been serious for many years. It has caused a great deal of resentment among building workers and people working in other industries. It must be treated seriously, and something must be done about it.
It may well be argued that there is a need for basic and drastic changes in the building industry. I am also aware that particular difficulties are created by the latest regulations. A short while ago a constituent came to see me. He is a stalwart trade unionist and a sub-contractor who has worked and paid his taxes honestly for a number of years. He felt somewhat offended by the photograph problem that applies to the new regulations.
There is some validity in that argument. While we are anxious to close the loopholes, we must also think about those sub-contractors who pay their whack consistently over many years.
I appreciate the difficulties, but I hope that my right hon. Friend will bear in mind the point that my constituent made to me. He asked whether it would be possible to provide alternative arrangements for people who had fixed addresses and paid their taxes regularly from the same address for many years. I appreciate that there would be difficulties in providing special arrangements for such people, but I agree with the hon. Member for Eastbourne that there is some feeling among such people—who are genuine sub-contractors, who pay their whack and are good trade unionists—about having to produce a photograph.
Some of the arguments that the Opposition have put forward are quite untrue. One such argument was that this Government have all along undermined the small business man. In fact, the claims on the Government Benches on behalf of small businesses and sub-contractors are far greater than the claims of the Conservative Opposition, who, in the main, represent very large businesses and organisations that are often detrimental to the interests of small businesses. I do not want to dwell on that point.

Mr. Ridley: rose—

Mr. Roberts: I shall not give way at this stage. I am sure that the hon. Gentleman will forgive me.
I do not wish to go into the long record of this Government, or the great number of steps that they have taken on behalf of small businesses. But they have tried to tackle the problem with ideas such as offering corporation taxpayers additional relief by raising the ceiling. The Government have also taken into account the management problems faced by small businesses, including sub-contractors.
A real problem that the small business man faces is that, ideally, he is a specialist but at the moment he is being asked to be a Jack of all trades, covering a wide range of management specialities. The Government have moved in that direction and have started the new consultancy service. Conservative Members may laugh, but at least the Government have taken steps in that direction, and it is early days yet. I am sure that my hon. Friend the Under-Secretary of State for Industry, who is peering at me, looks forward to the day when this consultancy service will be extended across Britain.
The Government have also considered the problem of small businesses and have said that if small business men can come together they are prepared to support their corporate efforts. The Government are also embarking on the problem of management training. Therefore, one cannot say that this Government have done nothing; they have done far more in that respect than the Conservatives. The Government have started helping small businesses. But I ask my right hon. Friend to consider the difficulties caused to genuine sub-contractors and see whether he can do something.
I know that Conservative Members will pooh-pooh my saying this, but the real answer to the needs of small business is to move taxation more from income to wealth. The problem in this country is not the death of small firms. Their death rate in Britain is lower than in Germany, the United States and many other Western countries. What is bad in Britain is that their birth rate is so much lower. We can have a higher birth rate of small firms only if taxation is


moved away from income, so that new ideas can be generated by small firms.
I hope that in the very near future the Government will move in that direction. If they do, they will make a considerable contribution to the future of small firms and sub-contractors.

9.6 p.m.

Mr. Andrew Welsh: I shall try to speak with my usual brevity and swiftness.
The good thing about this debate is that it gives the House an opportunity to look in detail at a specific problem affecting a specific part of the category of self-employed, which is a useful exercise, showing that the House is awakening to the problems of the self-employed. The debate is one of a series over the past two years. That is a good sign. I congratulate the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) on introducing it and allowing the House an opportunity to consider the problem.
The bad thing about the debate is that there is an accusation that the Government and the Labour Party in general do not know about, care about, or even understand, the problems of the self-employed. It is a great pity that tonight there is an example of that in the scarcity of Labour Members present and of speeches by Labour Members.
There certainly was a need for changes in the 1971 tax certificate system, which was far too loose and open to abuse. There was a need to stop the abuses caused by the very nature of the construction industry, some of which brought disrepute even to the genuine self-employed and to good small firms. There was a need to stop the cowboys and fly-by-night tax-dodgers. A strong case can be made for a tax certification and registration system designed to defeat those abuses.
Because of the peculiar nature and history of the construction industry, there is in addition a great general need for action to raise standards to provide stable employment structures in the industry, to encourage better conditions and to implement, for example, higher education and training for management and for the work force. The genuinely self-employed person need not necessarily fear such developments, if they encourage rising

standards in management, book-keeping and the running of businesses, if they are above-board enterprises.
Any improvement must allow for reasonable entry into the industry. If certification is the price of that, so be it. The cowboys and fly-by-night operators, the tax dodgers, are the real enemy of all who are genuinely concerned about the good of the construction industry.
There is, however, much in the Government's policy and approach that I find disturbing. If the 1971 regulations were far too loose, the 1975 version goes too far in the opposite direction. The self-employed are right to complain about certain aspects of the 714 certificate regulations. For a start, the regulations are excessively bureaucratic in terms of inspection and paperwork. For example, the need to have photographs attached to the applications produces a gut reaction. I do not like it. It makes me think of an identity-card-carrying system, which goes totally against the philosophy and history of this country. I ask the Minister to take this opportunity to explain the need for photographs, and to justify their introduction.
The regulations involve far too much totally unproductive paperwork. The Gestapo-type fears on this subject can be overdone—and have been overdone in certain quarters—but there is a multiplicity of inspectors badgering the self-employed and small businesses. In my constituency I have had plenty of examples of over-officious inspectors and officials. This, in its turn, produces an obvious and understandable reaction from a highly independent breed of people who simply want to be allowed to go on running their own businesses in a legal way. This is an important point, because it affects the morale of a highly important section of our economy.
I ask the Minister to exercise the utmost care in the operation of the scheme, and I hope that he will promise to watch over the inspectors and allow quick redress and appeal in cases where inspectors have been over-zealous.
There are immediate problems in the implementation of the regulations. I am informed that the Government's record in issuing these certificates leaves much to be desired, and a large backlog of applications has built up. Various figures have been bandied about, and I hope


that the Minister will give an accurate assessment of the figures involved. If it is true that about 199,000 certificates have taken more than one year to process, and there are twice that number still awaiting eventual decision, it is obvious that the scheme is breaking down. If it is correct that 50,000 applicants are awaiting a reply, something must be done to beat the backlog. It gives credence and great urgency to the request that a moratorium should be imposed.
The deadline of 6th April is drawing closer. I ask the Minister to say something about this and give a lead. I am told that if the 6th April deadline is adhered to strictly it may produce a cash flow crisis for certain firms, and may drive some smaller firms out of business altogether.
The regulations may create two different types of person. Already in the trade journals advertisements are appearing for certificated sub-contractors, so there is already a bias away from the non-certificated person whose application has simply been held up in the pipeline. The Minister should take the needs of these people into account, because the situation is becoming more and more desperate.
I want the Minister to explain the criteria for refusing certificates. I am informed that over-strict interpretation of the rules is causing problems, as well as considerable bitterness and hardship. We have heard examples tonight about the three-year rule. Surely, more reasonable flexibility could be applied to allow such people to be given certificates.
The Minister should realise that the self-employed feel that they are being discriminated against by the Government. I shall give one example, which could easily be met by the Government. An hon. Member from the Liberal Bench has already spoken of the Construction Industry Manpower Board, where self-employed people have deliberately not been included. I ask the Government to reconsider this decision and to give the self-employed a voice in matters affecting their own industry.
Because of all the problems involved in the present regulations, I ask the Minister to consider a moratorium on the present timetable so that the Government and all concerned can think the

whole thing through again and iron out the flaws in the present system. Without such an assurance, in view of all the problems inherent in the present system, I shall recommend my hon. Friends to vote against the Government tonight.

9.14 p.m.

Mr. Peter Rees: In view of the lack of time left for debate, I hope that the hon. Member for South Angus (Mr. Welsh) will forgive me if I do not comment on the points he made, although broadly I am very much in agreement with what he said.
There was, however, one contribution to the debate which cannot be passed over in silence, the contribution of the hon. Member for Birmingham, Perry Barr (Mr. Rooker), who came in and delivered one of the most disgraceful speeches that I have heard in the House and then rapidly left. The Prime Minister did the House a good service when he lifted the gag on the hon. Member, because it has enabled us to appraise afresh the quality of the representation at Perry Barr in this House. I find it quite outrageous that he should attack a professional person with an unblemished reputation who is in no position to defend himself here. The hon. Member for Perry Barr will be too cowardly—I choose my words carefully—to repeat his remarks outside this House. I challenge him to do so.

Hon. Members: Disgraceful. Withdraw that.

Mr. Deputy Speaker: Order. I ask the hon. and learned Member for Dover and Deal (Mr. Rees) to get on to the subject of the debate. Also, I think that he should withdraw the words "too cowardly".

Mr. Rees: Of course, Mr. Deputy Speaker, I shall always bow to your ruling. Perhaps I could say that the hon. Member's courage is not so notable that he is likely to repeat his allegations outside the House.
I shall not comment on what the hon. Member said about my hon. Friend the Member for Aberdeen, South (Mr. Sproat) because he is quite capable of taking care of himself. No doubt he will do ample justice to what was said about him tonight by the hon. Member for Perry Barr.
It is right, however, that the House should glance sideways at the obsession with tax avoidance demonstrated by the hon. Member for Perry Barr. It is a theme which occasionally runs through speeches from that side of the House. In this kind of debate we are all apt to say that we hold no brief for tax evasion, as distinct from tax avoidance. Avoidance is a question of degree and we all hold views on that. Evasion is something we are not prepared to defend. But I wonder whether we are right to take that smug attitude on all occasions. It must be within the knowledge of the House that a whole economic stratum in this country depends on tax-free labour.
I ask hon. Members on both sides to search their consciences and ask themselves whether their wives are not assisted by charladies who are paid gross wages and who probably do not make tax returns. From time to time their houses may be decorated by a self-employed decorator. I wonder whether that man really returns the remuneration paid to him by, possibly, the Financial Secretary under Schedule D. I do not want to be led into the disclosures of what happens in the Cabinets of Labour Governments, but I wonder whether Cabinet Ministers who own considerable establishments in the Home Counties ever have the tax-free assistance of old-age pensioners to dig their gardens? These are matters on which we should ponder from time to time, but perhaps tonight is not the occasion.

Mr. Eric S. Heffer: What about the hon. and learned Member?

Mr. Rees: I am happy to look in the mirror, and I am very ready to admit that my conscience is perhaps not quite as clear as it should be.
We are concerned tonight with what is condemned as a very gross abuse in the construction industry. I do not believe that contractors need to be defended by me, but we should recognise their difficulties. If they sought to deduct tax of 30 to 35 per cent. from people who offered labour to them, they would find this source drying up very quickly. It is not their difficulties on which we should focus tonight, but people who have perhaps unwittingly been hit by the measures

which the Financial Secretary introduced in 1975. I do not think that the hon. Member for Perry Barr took on board the fact that the original measure was introduced by a Conservative Administration in 1971. It may or may not have been defective, but we can consider that on another occasion.
We are concerned tonight with the specific and detailed measures introduced in the Finance (No. 2) Act 1975 which, I believe, are open to considerable abuse. I have no particular criticism of the Inland Revenue itself. It may be that this was a burden which it took on willingly, which the Inland Revenue induced the right hon. Gentleman the Chancellor to put upon its shoulders, but that is a matter of speculation and perhaps it is wrong for me to probe too deeply the source of this legislation. What is clear, however, is that the individual inspector has had a very difficult task put upon him.
I should say at once that I derive such knowledge as I have of the operation of that Act not only as a constituency Member but as a member—dare I refer again to the speech of the hon. Member for Perry Barr?—of a corrupt profession which has occasionally been asked to advise on the intricacies of these provisions. The more closely I look at them, the more I am concerned at them. There will be insufficient time for me to uncover every ambiguity and difficulty in the Act, but I should like to refer the Financial Secretary to four points on which I should like specific answers.
The first question concerns Schedule 12(1). It requires that the Revenue must be satisfied before it issues a certificate that various conditions are met. The last is that:
the business is carried on from proper premises and with proper equipment, stock and other facilities.
What if the person concerned is a self-employed plasterer operating on his own? In that situation, what are the proper premises for him to occupy? Is it enough for him to say that he works from his own home? What proper equipment, stock or other facilities must he demonstrate that he has to the inspector of taxes?
I believe that this provision puts an intolerable burden on the ordinary self-employed person who has probably been


working bona fide in this field. I am sure that even the hon. Member for Liverpool, Walton (Mr. Heffer) concedes that there is a place for such a person and that life should not be made intolerably difficult for him.
My next precise question concerns paragraph 3 of the schedule. That says that the applicant must demonstrate that he has complied
with all obligations imposed on him by or under the Income Tax Acts or the Taxes Management Act 1970 in respect of periods ending within the qualifying period and with all requests to supply to an inspector accounts of, or other information about, any business of his in respect of periods so ending.
What if the plasterer whose case I have instanced has several assessments of tax outstanding for past years, maybe over quite trivial questions? Nothing that impugns his bona fides or his integrity may be outstanding, but the inspector may still be bombarding him or his accountant with letters. How can he show the inspector that he has met all the requests made of him? I have encountered cases where this is so, and it has imposed an intolerable burden. The inspector can go back over six years asking questions which it is impossible to answer quickly and satisfactorily, and that will prevent the self-employed person from obtaining a certificate.

Mr. Graham Page: Many inspectors have taken the attitude that they do not need to disclose to the applicant their reasons for refusal of a certificate. The applicant may never know how he has transgressed under the income tax law. Is it not a denial of natural justice to deprive a man of his livelihood and not tell him why?

Mr. Rees: I entirely agree with my right hon. Friend. He has, with his usual precision, gone straight to the heart of the matter. If time permits, I shall touch on one other facet of this matter in relation to appeals.
The third point on which I require reassurance from the Financial Secretary derives from paragraph 6 of the schedule. It is all very well the Financial Secretary tapping his wrist-watch, but if he had induced the Patronage Secretary to muzzle the hon. Member for Perry Barr, who made no constructive contribution to the debate, I should have concluded a long

time ago. However, as long as I have sharp and detailed points to put to the Financial Secretary I shall continue to hold the Floor.
The Financial Secretary will note that paragraph 6 requires that an applicant has to demonstrate that he is insured in no less a sum than £250,000. What sort of liabilities is the plasterer whom I have instanced likely to incur that will come within one-tenth of that figure? Why should he be saddled with exorbitant premiums? Under the cover of a fiscal measure, it seems that there is an attempt to impose on people such as the plasterer I have instanced obligations that are no concern of the Inland Revenue.
In deference to the Financial Secretary I move on to my last precise point—namely, the question of appeal. In section 70(6) of the Act it is said that appeals can be taken to the general or special commissioners. I cannot remember who it was, but a Labour Member cast aspersions on the general commissioners because they once happened to include Mr. Poulson in their ranks. Those aspersions were unworthy. For the moment, I forget who made them. [HON. MEMBERS: "It was Perry Barr."] Was it Perry Barr? If so, I should have recalled it.
The commissioners are a public-spirited body of persons who give a great deal of time and service at no cost to the public. If the hon. Member for Perry Barr cannot retract any of his other allegations, he should at least retract his remarks about the commissioners.
The jurisdiction of the commissioners—this can be extracted from Section 70(6)—is
to review any relevant decision taken by the Board in the exercise of their functions under this section".
However, they cannot call in question the decision of the Board as to whether a self-employed person has met the conditions set out in Schedule 12. That is as I read the subsection. It may be that the Financial Secretary or, if time permits, the Attorney-General will be able to offer us reassurance. As I read it, it means that whether it discloses this fact or not, the Board can turn down an application for a certificate on the ground that one of the conditions in the schedule has not been met because there were queries by an inspector or because the self-employed person did not have premises, facilities or


adequate insurance cover. That cannot be challenged in a court of law. I believe, as does my right hon. Friend the Member for Crosby (Mr. Page), that this is a denial of justice.
I am conscious that the two front Benches wish to have adequate time to deal with these matters. I shall sit down after making the general observation that in dealing with this matter we are really dealing only with symptoms. The real questions to which we should be addressing ourselves, which with the permission of the trade union movement we may yet do this summer when considering the Finance Bill, is whether the burden of direct taxation is too high, whether the net has not been spread too wide and whether the rates are not too crushing. However, time does not permit me to enlarge on those matters.
I only hope that with your benevolent connivance, Mr. Deputy Speaker, and that of the leaders of the trade union movement, with maybe a little subsidiary support from the Financial Secretary, we shall be able to return to those subjects this summer.

19.28 p.m.

Mr. David Mitchell: I am grateful to my hon. and learned Friend the Member for Dover and Deal (Mr. Rees) for giving way. The case that I want to put to the House is a simple one. The Government intended to deal with tax evasion by labour-only sub-contractors in the building industry, and they have got it wrong. I think that it has been shown throughout the debate, from hon. Members on both sides of the House, that the Government have got it wrong. The effect will be to destroy many innocent small business men and to jerk up the rate of unemployment. My colleagues and I call on the Government to withdraw the scheme and to think again. If they are not prepared to do that, we ask them to introduce a moratorium for at least a year and to announce it tonight.
The Government's original intention was perfectly reasonable, namely, to catch the cowboys—the bogus labour only sub-contractors who took a gross wage and paid no tax. We support that. It is no part of our policy to support tax evasion. If there is tax evasion, it

is upon the rest of the community that the extra tax has to be levied. Therefore, we have a vested interest in seeing that evasion does not take place.
I am bound to ask the Financial Secretary whether he is aware that large numbers of holders of the existing certificates are being refused 714 certificates when no charges and no prosecutions have been proposed against them. That seems to raise a serious fact in relation to substantial companies.
I should like to discuss what has gone wrong and why. Originally it was labour-only sub-contractors. Now it is every contractor, large or small, who contracts for a public authority, housing association, local government and the like. It even comes down to getting a contract for tree felling, or installing lifts in an office block. The numbers involved are between 400,000 and 450,000; we do not know exactly. The latest position is over 23,000 refused, 53,000 under consideration and another 120,000 or 170,000 to come in in the next six weeks, with no reasonable likelihood of being processed in that time.
Last week, one of the largest contractors in this country, with 7,000 subcontractors, carried out a survey and found that only 411 had their 714 certificate. What is more, every one of its sub-contractors dealing with demolition—clearing sites before the main contractor can start work—had not got a certificate. I put it to the Financial Secretary that we shall have a far more chaotic situation than was intended or envisaged when these proposals were put forward.
The Financial Secretary and other Ministers have given repeated assurances that the certificate is not a passport to work, but that is exactly what it has become. If a man employs more than three men and he has not got a certificate, he will go bust, for reasons that I shall show later. If he has not got a 714 certificate, he cannot get a contract anyway.
Let us consider those two matters. If a man does not have a 714 certificate, 35 per cent. is deducted from his weekly payments. But, out of his weekly payments, he has to pay wages and the tax and national insurance on his employees. If he has 10 men working for him at


£60 each and £100 for himself on a contract, that is £700 a week. But he will get only £455, because the rest will have been deducted. How does he pay £600 to his men out of £455? That goes on, on average, for 34 weeks, accumulating that weekly deficit. No one can continue in business on that basis. He is bound to go bust. That is why this proposal is so damaging.
The other point is that local authorities as well as the Property Services Agency are saying "714, or do not bother to tender." A new and serious threat to the self-employed has therefore emerged. I do not know whether the Minister is aware of that matter. The Property Services Agency is now banning the self-employed from Government contracts.
I was astonished to learn of this ban. Indeed, had I not seen it with my own eyes and got it before me I should not have believed it. The circular that I have, which was brought to me by the Smaller Business Bureau, goes out with contract applications from the Property Services Agency. It states that it is a condition that
The contractor shall not sub-let any part of the contract without the previous consent in writing of the Superintending Officer …that the Superintending Officer will not approve …unless the contractor has provided …written assurance that the subcontract work will be executed by directly employed labour, not by self-employed gangs or individuals".
That is a direct ban on self-employed and small business labour contractors by the Government's own agency. It is a disgraceful situation.
The position is that for the self-employed there is no work in the Government sector and that if a self-employed person does not have a 714 certificate he will get no work and will go bust.
The Government have a special responsibility on their shoulders. They must proceed with great care if these certificates are to be passports to working. The House must ask whether the certificates are being issued fairly. I have to say to my hon. Friends and to the three or four hon. Members on the Government Benches who have bothered to attend the debate, that the certificates

are at present being withheld unfairly, unreasonably and arbitrarily.
The Government claim that the purpose of the certificates is related solely to tax. If that is so, I have some questions to ask about the 23,000 people who have been refused the right to work in the building industry. I pay tribute to the research that has been done by the Association of Self-employed People, which has gone in great detail into a number of cases.
I shall give the House some examples. People have been banned from having 714 certificates because they have not worked continuously for three years. One man suffered a bereavement in his family and went away for three weeks to settle his children with distant relatives. He was banned. A man was out of work for 2½ months with a broken hand. He was banned. Another man had parents who were ill—one of them died—in the Hebrides. That man went to look after his parents. He was banned. Another man had been working in Germany because of unemployment in this country. He came back, and he is not allowed a certificate. A man emigrated to Australia and came back. He is not allowed a certificate. Is it now a sin to be unemployed? A man who has been unemployed cannot get a certificate. The purpose of the certificate relates solely to tax? The Minister should be ashamed of himself for claiming that.
My hon. Friend the Member for Eastbourne (Mr. Gow) drew attention to the tyranny of the new bureaucracy and gave the example of one of his constituents who was denied a certificate because he had grown a moustache. If I were to shave off a moustache, grow a beard, become bald, or go grey, I presume that I should be denied a certificate.
We are told that the purpose relates solely to tax, but what about national insurance? I have a copy of a letter from the inspector of taxes which refers to
The fact that National Insurance contributions instead of being paid when due were paid as follows: 1964–65 and 1965–66 on 27 April 1966.
That was three years back. Tax only? What is this? It is a degree of bureaucratic interference that truly deserves to be called tyranny.
What about not having a public liability fund cover for £250,000? Is that not a matter for tax? What about the phrase "mainly through a bank account"? A small business man is paid cash, and on a Friday when the banks close at 3.30 p.m. he must give cash to his men when they finish work. All such business men take the cash that they are given and pass it on to their men in wages. Only that which is left over goes into his bank account. That is a respectable way of doing business. One cannot do anything else, because of the banking hours.
What does "proper records" mean? Does the Minister expect the small business man to be as good at book-keeping as the Inland Revenue would be at bricklaying? Many honest men get behind with their tax affairs but they do not lose their right to work as a result. That is what is happening in this situation. Because of the fault of an accountant, because of illness, or because a wife keeps the books, a business man may fall behind with his records and he is denied the right to work, without any right of appeal.
We then reach the Catch 22 situation. No contract—not allowed to have a 714. No 714—not allowed to have a contract. That position is wholly unacceptable.
I do not want to eat into the Minister's time. I want to make one final precise and exact point, which is much more urgent than the other things about which I have talked.
This will cause a very sharp rise in unemployment. It has already risen from 700,000 to 1,400,000, and it is on its way towards 1¾ million. In the building industry 250,000 are unemployed already. There are 23,000-odd applicants refused here, and 18,000 expected to be refused out of the 53,000 applicants. Another 30,000 are expected to be refused out of the remaining applicants. That adds up to between 70,000 and 80,000 more people who will be put out of work as a result of this requirement.
We have a Government of unemployment led by a group of unemployables. I urge hon. Members on both sides of the House to have that in mind when they vote tonight.

9.46 p.m.

The Financial Secretary to the Treasury (Mr. Robert Sheldon): Tribute has been paid from all parts of the House, and quite rightly, to those who are self-employed and who, through their initiative, independence and innovation, are a value to the community. I certainly wish to endorse everything that has been said on that account.
The hon. Member for Basingstoke (Mr. Mitchell) mentioned some of the disadvantages that arise from the introduction of the 714 certificate. I would say two things at the outset. First, that was a natural consequence of the previous legislation. Secondly, in the steady progression of speeches that followed the introduction by the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), we saw a considerable and improving moderation of language, which I found congenial to me in so far as it affected the work of the inspectors of taxes.
The hon. Member for Cirencester and Tewkesbury talked about the arbitrary way in which those inspectors carry out their work. I see that he nods his head. He made his condemnation of their actions quite explicit in what he had to say. I was at any rate satisfied by the hon. Member for Maldon (Mr. Wakeham), who is very experienced in these matters as a former accountant, and the hon. Member for Eastbourne (Mr. Gow), who said that he had no criticism to make of the inspectors of taxes or of the Inland Revenue. I appreciated that. I noted, too, the statement by the hon. and learned Member for Dover and Deal (Mr. Rees), who again endorsed that particular viewpoint, and I appreciated that, too.
It is quite wrong of the hon. Member for Cirencester and Tewkesbury to make those statements. If he has any complaint, his redress is open to him, as, indeed, it is open to any hon. Member. Except in so far as there is maladministration, about which the hon. Gentleman has the kind of recourse of which he knows, what we should be discussing here is the legislation that is due to be implemented and the problems that hon. Members may foresee as the result of that legislation.
We know that in the 1960s there was clear evidence of growing tax evasion by sub-contractors. An attempt was made


by both Governments of that time to trace those who were not meeting their income tax liabilities. Because of the nature of the occupation and the movement around the country, substantial sums of money were not being collected. This led in due course to the special scheme that was introduced in 1971 and which came into effect in 1972. The object of that legislation was to secure deduction from those self-employed sub-contractors. There was to be a tax certificate, and the introduction of the certificate and voucher was to be the means by which this abuse was to come to an end.
Had that worked, of course, there would have been pleasure and delight in all parts of the House. But it did not work. There was forgery, theft and impersonation. That legislation covered all the sub-contractors—I remind the hon. Member for Basingstoke of that—as well as labour-only sub-contractors. It excluded companies, and it did not deal with those who went in and out of self-employment. It did not include those who had just begun to pay tax. There was widespread evasion by those who claimed, unjustifiably, to be in one or more of those categories.
The evasion continued, and the hon. Member for Maldon rightly asked for evidence of the way in which the present legislation was failing in its purpose. I can give him two sets of figures which might help to convince him of the position. In 1975–76 there were 99 prosecutions by the Inland Revenue and 167 prosecutions by the police. I am informed that it was only because of the limited resources available for prosecutions that the number was as low as I have stated.
The new scheme provided for certificates and proper security documents. There was the requirement of proof of reliability as a taxpayer over three years, and that issue has been discussed during the debate. There was the necessity to establish a bona fide business, and, most important of all in some respects, companies were brought into the picture.
The present position, about which the hon. Member for Basingstoke asked, is as follows. There have been 277,000 applications, of which some 200,000 have been approved, about 23,000 have been refused and 53,000 are under consideration.

I propose to say something about the applications under consideration because the criticism has been made that they are the result of excessive delay by the Inland Revenue. The present state of affairs is due not to delay by the Inland Revenue but, in the main, to the Inland Revenue asking for certain information and accounts and for the payment of taxes over the preceding three years. Consideration of those cases is incomplete, and I ask the House to accept what I have said in that light.

Mr. Graham Page: Will the right hon. Gentleman see that instructions go to inspectors to tell applicants why certificates are refused? Many of the cases quoted by the right hon. Gentleman are outstanding because the inspectors have said that they are not obliged to give reasons for refusal. As I have said before, that is a denial of justice.

Mr. Sheldon: I shall come to refusals and the ways open to an individual who has been turned down to carry out his appeals procedure. I think that I shall be able to do that in a way that will satisfy the House.
Nearly 200,000 certificates have been issued, and 145,000 of those were isued to individuals. This is the nub of the whole problem. We are dealing largely with individuals who claim the right to regard themselves as self-employed. Nobody has any difficulty in accepting that, although it is an unusual situation in industry generally that so large a proportion should claim to be self-employed. There is no objection to that, but, naturally, one has to ensure that when there is such a large number the due tax will be collected at the end of the year. That did not happen under the previous legislation, just as it did not happen during the operation of the legislation passed by the Opposition when they were the Government.
Let me now say something about the certificates that were refused. Of the 23,000 cases that were refused, there were 6,000 appeals. Of those appeals, some 3,000 resulted in the persons concerned putting their affairs in order and being granted certificates. The other 3,000 appeals were heard by the commissioners, and 2,750 of those were rejected and 250 were accepted.
If any hon. Member has any case in which he feels that harsh treatment has been accorded to a constituent or to someone of whom he has personal knowledge, I shall be happy to look into it and inquire into the reasons adduced for the action that was taken.

Mr. David Mitchell: Is the Minister saying that in the cases to which he has referred, where appeals have been made, half of the appeals have been allowed? If so, does that not imply that in cases where it has not been possible to make an appeal because the matter is not appealable about half of them would have been allowed also?

Mr. Sheldon: Certainly they could have appealed in the other cases to the commissioners on the facts adduced to them. The trouble with most of these cases, however, is that the people have not brought their tax affairs up to date.
It is not true to say that the certificate is a work permit. I have inquired whether major local authorities are prepared to deal with uncertificated sub-contractors. I find that local authorities operate over 200 deduction schemes, and I have a list of large local authorities which are all prepared to make these deductions. About 50,000 private contractors are also prepared to engage sub-contractors outside the scheme. In every area, schemes are operating for those who for some reason cannot obtain the certificate. Of course, there are many other kinds of jobs that a sub-contractor can do for firms or individuals engaged in building operations and for which no deduction is required.
In the case of sub-contractors who have committed a minor or technical offence and have been refused a certificate, I have said that I am prepared to look at individual cases. As the Inland Revenue has made clear, however, minor or technical offences are not a bar to obtaining a certificate.
It has been contended that there has not been enough time for the self-employed sub-contractors to bring their tax affairs up to date. This proposal was announced in the Budget and enacted in the Finance Bill of 1975. Therefore, for almost two years, and, I suppose,

for a period before that, sub-contractors knew the kind of thing that would happen. They had only to bring their tax affairs into order in the same way as every other taxpayer has to do. Those who did not do so are in some difficulty in claiming that these matters were unknown to them.
We are also talking about the difficulties of an industry in which there is great mobility of labour, with only slender ties between employer and employee and without the geographical ties that exist in other industries. In this legislation we have not tried to change the operation of the industry. We accept the way in which it works. Obviously, it is necessary to tailor tax measures to the industry rather than chain them to any preconceptions that we might have.
The scheme is a new one. I take the point made by the hon. Member for South Angus (Mr. Welsh). I undertake to survey closely the operation of the new scheme and to keep an open mind as to the changes that might be felt to be desirable following the experience gained in the last six months.
A large number of people have called themselves self-employed for reasons we well know and accept, but it means that they have to be contrasted with those who work in the same industries outside but who are employees. Although we have no objection to the self-employed being treated in this way, we have the right and the duty to ensure that we collect the taxes that are due.
Let me say a few words about the way in which the general commissioners work If the conditions are satisfied when an individual or a sub-contractor goes to the Inland Revenue, a certificate is granted. However, if the conditions are not satisfied, if the tax paid in the previous three years does not match up with what is required, if the accounts have not been adequately prepared or there is some other technical reason, those concerned may be issued with a certificate at the discretion of the Inland Revenue. If the Inland Revenue does not exercise that discretion, those concerned can appeal to the general commissioners. If they do, the appeal can be accepted by the commissioners, in which case a certificate will be granted. If it is not accepted, it is still up to the Inland


Revenue to make its own decision in the end.

Mr. Ridley: rose—

Mr. Sheldon: So much time has already been taken from me that I cannot give way. The hon. Gentleman should have ensured that I had sufficient time to reply to the debate.

Mr. Ridley: rose—

Mr. Speaker: Order. Clearly, the Minister does not wish to give way.

Mr. Sheldon: The inspector can go even further if the person applying for a certificate is three years in arrear and brings himself up to date, he can obtain a certificate. If the accounts are contested, even if something is paid on account of the contested accounts it may be sufficient to obtain a certificate. It is not the intention of the Inland Revenue or of Treasury Ministers to harass the taxpayer. The disputed assessment will not be use as an artificial reason for denying certificates to self-employed sub-contractors.
The claim has been made by many Opposition Members that there is a disadvantage to those who do not meet their obligations. By that, they mean that they should not pay their rightful taxes, as do all other taxpayers. But what about the taxpayers and building operatives

who work full time for an employer? Indeed, what about the building employers who are meeting their obligations in full? They have to be considered too, and the relationship between the one and the other needs to be fair.

I believe that the self-employed have never claimed that their existence depended on tax evasion. They have valuable skills and determination, they play their rôle as innovators and they make their due contribution to the economy. We have taken a failed Opposition scheme and made it workable. The Opposition are defending not so much the self-employed as the abuses that have existed for far too long. Our aim is to end those abuses, and we believe that the scheme will help to achieve that end.

Mr. Gow: On a point of order, Mr. Speaker. The Financial Secretary to the Treasury did not answer an important point that was put to him—

Mr. Speaker: Order. If the hon. Gentleman's point of order continues until 10 o'clock, he will talk out the motion.

Question put, That this House do now adjourn:—

The House divided: Ayes. 269, Noes 278.

DivisionNo.63.]
AYES
[9.59 p.m.


Adley, Robert
Bulmer, Esmond
Eyre, Reginald


Aitken, Jonathan
Burden, F. A.
Fairbairn, Nicholas


Alison, Michael
Butler, Adam (Bosworth)
Fairgrieve, Russell


Amery, Rt Hon Julian
Carlisle, Mark
Farr, John


Arnold, Tom
Carson, John
Fell, Anthony


Atkins, Rt Hon H.(Spelthorne)
Chalker, Mrs Lynda
Fisher, Sir Nigel


Awdry, Daniel
Channon, Paul
Flelcher-Cooke, Charles


Baker, Kenneth
Churchill, W. S.
Fookes, Miss Janet


Banks, Robert
Clark, Alan (Plymouth, Sutton)
Forman, Nigel


Beith, A. J.
Clark, William (Croydon S)
Fowler, Norman (Sutton C'f'd)


Bell, Ronald
Clarke, Kenneth (Rushcliffe)
Fox, Marcus


Bennett, Dr Reginald (Fareham)
Cockcroft, John
Fraser, Rt Hon H. (Stafford &amp; St)


Benyon, W.
Cooke, Robert (Bristol W)
Freud, Clement


Berry, Hon Anthony
Cope, John
Fry, Peter


Biffen, John
Cordle, John H.
Galbraith, Hon T. G. D.


Biggs-Davison, John
Cormack, Patrick
Gardiner, George (Reigate)


Blaker, Peter
Corrie, John
Gardner, Edward (S Fylde)


Body, Richard
Costain, A. P.
Gilmour, Rt Hon Ian (Chesham)


Boscawen, Hon Robert
Crltchley, Julian
Gilmour, Sir John (East Fife)


Bottomley, Peter
Crouch, David
Glyn, Dr Alan


Bowden, A. (Brighton, Kemptown)
Dean, Paul (N Somerset)
Godber, Rt Hon Joseph


Boyson, Dr Rhodes (Brent)
Dodsworth, Geoffrey
Goodhew, Victor


Braine, Sir Bernard
Douglas-Hamilton, Lord James
Goodlad, Alastair


Brittan, Leon
Drayson, Burnaby
Gorst, John


Brocklebank-Fowler, C.
duCann, Rt Hon Edward
Gow, Ian (Eastbourne)


Brotherton, Michael
Dunlop, John
Gower, Sir Raymond (Barry)


Brown, Sir Edward (Bath)
Durant, Tony
Grant, Anthony (Harrow C)


Bryan, Sir Paul
Eden, Rt Hn Sir John
Grieve, Percy


Buchanan-Smith, Alick
Edwards, Nicholas (Pembroke)
Griffiths, Eldon


Buck, Antony
Emery, Peter
Grimond, Rt Hon J.


Budgen, Nick
Evans, Gwynfor (Carmarthen)
Grist, Ian




Grylls, Michael
Mather, Carol
St. John-Stevas, Norman


Hall, Sir John
Maude, Angus
Scott, Nicholas


Hall-Davis, A. G. F.
Maudling, Rt Hon Reginald
Shaw, Giles (Pudsey)


Hamilton, Michael (Salisbury)
Mawby, Ray
Shelton, William (Streatham)


Hampson, Dr Keith
Maxwell-Hyslop, Robin
Shepherd, Colin


Hannam, John
Mayhew, Patrick
Shersby, Michael


Harvie Anderson, Rt Hon Miss
Meyer, Sir Anthony
Silvester, Fred


Hastings, Stephen
Miller, Hal (Bromsgrove)
Sims, Roger


Havers, Sir Michael
Mills, Peter
Sinclair, Sir George


Hayhoe, Barney
Miscampbell, Norman
Skeet, T. H. H.


Heath, Rt Hon Edward
Mitchell, David (Basingstoke)
Smith, Dudley (Warwick)


Henderson, Douglas
Moate, Roger
Speed, Keith


Heseltine, Michael
Monro, Hector
Spence, John


Hicks, Robert
Montgomery, Fergus
Spicer, Michael (S Worcester)


Higgins, Terence L.
Moore, John (Croydon C)
Sproat, lain


Hodgson, Robin
More, Jasper (Ludlow)
Stainton, Keith


Holland, Philip
Morgan-Giles, Rear-Admiral
Stanbrook, Ivor


Hooson, Emlyn
Morris, Michael (Northampton S)
Stanley, John


Hordern, Peter
Morrison, Charles (Devizes)
Steel, Rt Hon David


Howe, Rt Hon Sir Geoffrey
Morrison, Hon Peter (Chester)
Steen, Anthony (Wavertree)


Howell, David (Guildford)
Mudd, David
Stewart, Rt Hon Donald


Howells, Geraint (Cardigan)
Nelson, Anthony
Stewart, Ian (Hitchin)


Hunt, David (Wirral)
Neubert, Michael
Stokes, John


Hunt, John (Bromley)
Newton, Tony
Stradling Thomas, J.


Hurd, Douglas
Nott, John
Tapsell, Peter


Hutchison, Michael Clark
Onslow, Cranley
Taylor, R. (Croydon NW)


Irving, Charles (Cheltenham)
Oppenheim, Mrs Sally
Taylor, Teddy (Cathcart)


James, David
Page, John (Harrow West)
Tebbit, Norman


Jenkin, Rt Hon P. (Wanst' d &amp; W'df'd)
Page, Rt Hon R. Graham (Crosby)
Temple-Morris, Peter


Johnson Smith, G. (E Grinstead)
Page, Richard (Workington)
Thatcher, Rt Hon Margaret


Jones, Arthur (Daventry)
Paisley, Rev Ian
Thomas, Dafydd (Merioneth)


Jopling, Michael
Pardoe, John
Thomas, Rt Hon P. (Hendon S)


Joseph, Rt Hon Sir Keith
Parkinson, Cecil
Thompson, George


Kaberry, Sir Donald
Pattie, Geoffrey
Thorpe, Rt Hon Jeremy (N Devon)


Kilfedder, James
Penhaligon, David
Townsend, Cyril D.


King, Evelyn (South Dorset)
Percival, Ian
Trotter, Neville


Knight, Mrs Jill
Peyton, Rt Hon John
van Straubenzee, W. R.


Knox, David
Pink, R. Bonner
Vaughan, Dr Gerard


Lamont, Norman
Price, David (Eastleigh)
Viggers, Peter


Langford-Holt, Sir John
Prior, Rt Hon James
Wakeham, John


Latham, Michael (Melton)
Pym, Rt Hon Francis
Walder, David (Clitheroe)


Lawrence, Ivan
Raison, Timothy
Walker, Rt Hon P. (Worcester)


Lawson, Nigel
Rathbone, Tim
Wall, Patrick


Lester, Jim (Beeston)
Rawlinson, Rt Hon Sir Peter
Walters, Dennis


Lewis, Kenneth (Rutland)
Rees, Peter (Dover &amp; Deal)
Watt, Hamish


Lloyd, Ian
Rees-Davies, W. R.
Weatherill, Bernard


Loveridge, John
Renton, Rt Hon Sir D. (Hunts)
Wells, John


Luce, Richard
Renton, Tim (Mid-Sussex)
Welsh, Andrew


McAdden, Sir Stephen
Rhodes James, R.
Whitelaw, Rt Hon William


MacCormick, Iain
Ridley, Hon Nicholas
Wiggin, Jerry


McCrindle, Robert
Ridsdale, Julian
Wigley, Dafydd


Macfarlane, Neil
Rifkind, Malcolm
Wilson, Gordon (Dundee E)


MacGregor, John
Rippon, Rt Hon Geoffrey
Winterton, Nicholas


Macmillan, Rt Hon M. (Farnham)
Roberts, Wyn (Conway)
Wood, Rt Hon Richard


McNair-Wilson, M. (Newbury)
Rodgers, Sir John (Sevenoaks)
Young, Sir G. (Ealing, Acton)


McNair-Wilson, P. (New Forest)
Ross, Stephen (Isle of Wight)
Younger, Hon George


Madel, David
Rossi, Hugh (Hornsey)



Marshall, Michael (Arundel)
Rost, Peter (SE Derbyshire)
TELLERS FOR THE AYES:


Marten, Neil
Royle, Sir Anthony
Mr. Spencer Le Marchant and


Mates, Michael
Sainsbury, Tim
Mr. Michael Roberts.




NOES


Abse, Leo
Bray, Dr Jeremy
Cook, Robin F. (Edin C)


Allaun, Frank
Brown, Hugh D. (Provan)
Corbett, Robin


Anderson, Donald
Brown, Robert C. (Newcastle W)
Cowans, Harry


Archer, Peter
Brown, Ronald (Hackney S)
Cox, Thomas (Tooting)


Armstrong, Ernest
Buchan, Norman
Craigen, Jim (Maryhill)


Ashley, Jack
Buchanan, Richard
Crawshaw, Richard


Atkins, Ronald (Preston N)
Butler, Mrs Joyce (Wood Green)
Cronin, John


Atkinson, Norman
Callaghan, Rt Hon J. (Cardiff SE)
Crowder, F. P.


Barnett, Guy (Greenwich)
Callaghan, Jim (Middleton &amp; P)
Cryer, Bob


Barnett, Rt Hon Joel (Heywood)
Campbell, Ian
Cunningham, G. (Islington S)


Bates, Alf
Canavan, Dennis
Cunningham, Dr J. (Whiteh)


Bean, R. E.
Cant, R. B.
Davidson, Arthur


Benn, Rt Hon Anthony Wedgwood
Carmichael, Neil
Davies, Bryan (Enfield N)


Bennett, Andrew (Stockport N)
Carter, Ray
Davies, Denzil (Llanelli)


Bidwell, Sydney
Carter-Jones, Lewis
Davies, Ifor (Gower)


Bishop, E. S.
Cartwright, John
Davis, Clinton (Hackney C)


Blenkinsop, Arthur
Castle, Rt Hon Barbara
Dean, Joseph (Leeds West)


Boardman, H.
Clemitson, Ivor
Dell, Rt Hon Edmund


Booth, Rt Hon Albert
Cocks, Rt Hon Michael
Dempsey, James


Bottomley, Rt Hon Arthur
Cohen, Stanley
Doig, Peter


Boyden, James (Bish Auck)
Coleman, Donald
Dormand, J. D.


Bradley, Tom
Colquhoun, Ms Maureen
Douglas-Mann, Bruce







Duffy. A. E. P.
Lambie, David
Roderick, Caerwyn


Dunn, James A.
Lamborn, Harry
Rodgers, George (Chorley)


Dunnett, Jack
Lamond, James
Rodgers, Rt Hon William


Eadie, Alex
Latham, Arthur (Paddington)
Rooker, J. W.


Edge, Geoff
Leadbitter, Ted
Rose, Paul B.


Edwards, Robert (Wolv SE)
Lee, John
Ross, Rt Hon W. (Kilmarnock)


Ellis, John (Brigg &amp; Scun)
Lestor, Miss Joan (Eton &amp; Slough)
Rowlands, Ted


English, Michael
Lever, Rt Hon Harold
Ryman, John


Ennals, David
Lewis, Ron (Carlisle)
Sandelson, Neville


Evans, Fred (Caerphilly)
Lipton, Marcus
Sedgemore, Brian


Evans, loan (Aberdare)
Litterick, Tom
Selby, Harry


Ewing, Harry (Stirling)
Lomas, Kenneth
Shaw, Arnold (Ilford South)


Faulda, Andrew
Loyden, Eddie
Sheldon, Rt Hon Robert


Fernyhough, Rt Hon E.
Luard, Evan
Shore, Rt Hon Peter


Fitch, Alan (Wigan)
Lyon, Alexander (York)
Short, Mrs Renée (Wolv NE)


Fitt, Gerard (Belfast W)
Lyons, Edward (Bradford W)
Sillars, James


Flannery, Martin
Mabon, Rt Hon Dr J. Dickson
Silverman, Julius


Fletcher, Ted (Darlington)
McCartney, Hugh
Skinner, Dennis


Foot, Rt Hon Michael
Mc Donald, Dr Oonagh
Small, William


Ford, Ben
McElhone, Frank
Smith, John (N Lanarkshire)


Forrester, John
MacFarquhar, Roderick
Snape, Peter


Fowler, Gerald(The Wrekin)
Mc Guire, Michael (Ince)
Spearing, Nigel


Fraser, John (Lambeth, N'w'd)
MacKenzie, Gregor
Spriggs, Leslie


Freeson, Reginald
Mackintosh, John P.
Stallard, A. W.


Garrett, John (Norwich S)
Maclennan, Robert
Stewart, Rt Hon M.(Fulham)


Garrett, W. E. (Wallsend)
McMillan, Tom (Glasgow C)
Stoddart, David


George, Bruce
McNamara, Kevin
Stott, Roger


Gilbert, Dr John
Madden, Max
Strang, Gavin


Ginsburg, David
Magee, Bryan
Strauss, Rt Hon G. R.


Golding, John
Mahon, Simon
Summerskill, Hon Dr Shirley


Gould, Bryan
Mallalieu, J. P. W.
Swain, Thomas


Gourlay, Harry
Marks, Kenneth
Taylor, Mrs Ann (Bolton W)


Graham, Ted
Marshall, Dr Edmund (Goole)
Thomas, Jeffrey (Abertillery)


Grant, George (Morpeth)
Marshall, Jim (Leicester S)
Thomas, Mike (Newcastle E)


Grocott, Bruce
Mason, Rt Hon Roy
Thomas, Ron (Bristol NW)


Hamilton, James (Bothwell)
Maynard, Miss Joan
Thorne, Stan (Preston South)


Hardy, Peter
Meacher, Michael
Tierney, Sydney


Harrison, Walter (Wakefield)
Mellish, Rt Hon Robert
Tinn, James


Hart, Rt Hon Judith
Mendelson, John
Torney, Tom


Hattersley, Rt Hon Roy
Mikardo, Ian
Tuck, Raphael


Hayman, Mrs Helene
Millan, Rt Hon Bruce
Urwin, T. W.


Healey, Rt Hon Denis
Moonman, Eric
Varley, Rt Hon Eric G.


Heffer, Eric S.
Morris, Alfred (Wythenshawe)
Wainwright, Edwin (Dearne V)


Hooley, Frank
Morris, Charles R. (Openshaw)
Walden, Brian (B'ham, L'dyw'd)


Horam, John
Morris, Rt Hon J. (Aberavon)
Walker, Harold (Doncaster)


Howell, Rt Hon Denis (B'ham, Sm H)
Moyle, Roland
Walker, Terry (Kingswood)


Hoyle, Doug (Nelson)
Mulley, Rt Hon Frederick
Ward, Michael


Huckfield, Les
Murray, Rt Hon Ronald King
Watkins, David


Hughes, Rt Hon C. (Anglesey)
Newens, Stanley
Watkinson, John


Hughes, Robert (Aberdeen N)
Noble, Mike
Weetch, Ken


Hughes, Roy (Newport)
O'Halloran, Michael
Weitzman, David


Hunter, Adam
Orbach, Maurice
Wellbeloved, James


Irvine, Rt Hon Sir A. (Edge Hill)
Orme, Rt Hon Stanley
White, Frank R. (Bury)


Irving, Rt Hon S. (Dartford)
Ovenden, John
White, James (Pollok)


Jackson, Colin (Brighouse)
Owen, Rt Hon Dr David
whitehead, Phillip


Jackson, Miss Margaret (Lincoln)
Padley, Walter
Whitlock, William


Janner, Greville
Palmer, Arthur
Willey, Rt Hon Frederick


Jay, Rt Hon Douglas
park, George
Williams, Rt Hon Alan (Swansea W)


Jeger, Mrs Lena
Parker, John
Williams, Alan Lee (Hornch'ch)


Jenkins, Hugh (Putney)
Parry, Robert
Williams, Rt Hon Shirley (Hertford)


John, Brynmor
Pavitt, Laurie
Williams, Sir Thomas (Warrington)


Johnson, James (Hull West)
Pendry, Tom
Wilson, Alexander (Hamilton)


Johnson, Walter (Derby S)
Perry, Ernest
Wilson, William (Coventry SE)


Jones, Alec (Rhondda)
Prentice, Rt Hon Reg
Wise, Mrs Audrey


Jones, Barry (East Flint)
price, C. (Lewisham W)
Woodall, Alec


Jones, Dan (Burnley)
price, William (Rugby)
Woof, Robert


Judd, Frank
Radice, Giles
Wrigglesworth, Ian


Kaufman, Gerald
Rees, Rt Hon Merlyn (Leeds S)
Young, David (Bolton E)


Kelley, Richard
Richardson, Miss Jo



Kerr, Russell
Roberts, Albert (Normanton)
TELLERS FOR THE NOES:


Kilroy-Silk, Robert
Robinson, Geoffrey
Mr. Joseph Harper and


Kinnock, Neil
Roberts, Gwilym (Cannock)
Mr. Joseph Ashton.

Question accordingly negatived.

VACCINE-DAMAGED CHILDHEN

ADDENDUM

Official Report, 8th February 1977 Vol. 925.

In column 1239, after fourth paragraph, the following should have been circulated as part of the statement by Mr. Ennals:

Following is the information—

1. Infectious Diseases—Fall in number of cases
Since diphtheria immunisation began the level of the disease in this country has fallen from 55,000 cases and nearly 3,000 deaths a year before 1942 to fewer than 10 cases and no deaths in 1976. Poliomyelitis has fallen on a similar scale. Whooping cough is down from 90,000 cases and 85 deaths in 1956 to fewer than 4,000 cases and four deaths in 1976.

2. Number of Actual Vaccinations Given in each year in England and Wales

Whooping Cough Immunisation of Persons under 16 years

TOTAL NUMBER OF PERSONS UNDER 16 IMMUNISED


1960
…
…
626,401


1961
…
…
690,070


1962
…
…
578,474


1963
…
…
619,201


1964
…
…
679,382


1965
…
…
697,653


1966
…
…
693,805


1967
…
…
711,254


1968
…
…
629,183


1969
…
…
457,407


1970
…
…
620,381


1971
…
…
642,533


1972
…
…
632,495


1973
…
…
588,516


1974
…
…
457,753


1975
…
…
259,810

3. Continuing Study
In a continuing follow-up study in the past two years of children immunised in a metropolitan

region, involving over 80,000 doses of vaccine containing a whooping cough component, no case of permanent brain damage has yet been encountered.

4. Advice given to doctors about contraindications to vaccination
In 1963, after the setting up of the Joint Committee on Vaccination and Immunisation, the first Memorandum entitled "Immunisation against Infectious Disease" was issued to doctors; this was revised in 1965, 1968 and 1972. Advice on contra-indications was included in all these booklets. This has been elaborated on a number of occasions in letters sent to doctors by the Chief Medical Officers.
Copies of the current version of the Memorandum are being placed in the Library.

5. The Joint Committee on Vaccination and Immunisation
The Joint Committee on Vaccination and Immunisation is an independent body which was set up jointly by the Central and Scottish Health Services Councils in 1962
to advise the Health Ministers on all medical aspects of vaccination and immunisation".
It has 6 Sub-Committees as follows:

(i) Measles Sub-Committee set up 1963.
(ii) Poliomyelitis Sub-Committee set up 1963.
(iii) Smallpox Sub-Committee set up 1963.
(iv) BCG Sub-Committee set up 1968—(previously an advisory group from 1966).
(v) Rubella Sub-Committee 1970—(previously an advisory group from 1969).
(vi) Complications of Vaccination Sub-Committee set up in 1974.

In addition there are two advisory groups (with some co-opted members):

(i) Influenza Advisory Group
(ii) Tetanus Advisory Group

The Joint Committee reports to the Central Health Services Council and the Scottish Health Services Planning Council.
The Sub-Committees and Advisory Groups both report to the Joint Committee.

BUSINESS OF THE HOUSE

Ordered,

That the Rent (Agriculture) (Amendment) Bill [Lords] may be proceeded with at this day's sitting, though opposed, until any hour.—[Mr. Bates.]

RENT (AGRICULTURE) (AMENDMENT) BILL [Lords]

Order for Second Reading read.

10.17 p.m.

The Under-Secretary of State for the Environment (Mr. Ernest Armstrong): I beg to move, That the Bill be now read a Second time.
The Bill seeks to amend the Rent (Agriculture) Act 1976 which gave security of tenure to agricultural workers housed by the farmers who employed them. The amending Bill is narrowly drawn and deals with the result of a minor clerical error which occurred in the Public Bill Office in another place.
In Committee in the other place, the Opposition moved an amendment designed to set a time limit on local housing authorities for notification of their decision on any application for rehousing. The Government accepted the principle of the time limit and tabled an amendment accordingly on Report. Under this, an authority would have a duty to say whether it accepted any application within three months, and in cases where the advice of the Agricultural Dwelling House Advisory Committee was involved the time limit would be two months after receiving ADHAC advice. This was approved and correctly put into the text of the Bill as amended on Report.
When the necessary list of amendments was being prepared by the Public Bill Office in another place for subsequent consideration in this House, a minor clerical error was made. A wrong line reference was put in. The figure "7" was inserted instead of the figure "4", which meant that three lines of text—lines 4 to 7—were removed which should not have been removed, and this made nonsense of the particular section. When the Lords amendments were discussed in the Commons—it will be recalled that I spoke to this particular amendment—the

minor clerical error was not noticed and the Bill proceeded to Royal Assent with the error undetected.
The error was subsequently brought to the notice of the Clerk of the Parliaments, and in considering how he should discharge his responsibility for publication of Acts of Parliament he decided to take the view that the amendment had not been made—because the Lords had deleted words only to line 4 while the Commons deleted words to line 7—and, therefore, the Act was printed without the amendment.
My Department informed local authorities of the clear intention of Parliament and requested them to observe the time limits. I have had no complaints on that score. The Bill will confirm that intention, translate it into law and immediately carry through the clear wish of Parliament. The Bill is due to come into effect two weeks after Royal Assent.
Given that background—that we are rectifying the consequences of a slip in parliamentary procedure—it was my hope that the Bill could reach the statute book with the minimum of delay. In the other place the whole proceedings on the Bill were completed in 15 minutes. I had expected us to complete all stages tonight.
I have been in continuous correspondence with the hon. Member for Hornsey (Mr. Rossi). I regret the need for further delay when the Government have taken such urgent action to correct what was a minor error, the figure "7" being written instead of the figure "4". The Bill was published on 26th January. It clearly expresses what was Parliament's intention and it meets the Opposition's strongly expressed desire to give statutory effect to time limits for decisions by housing authorities on applications for rehousing.
I ask the House to give the Bill a Second Reading.

10.20 p.m.

Mr. Hugh Rossi: I am grateful to the Minister for responding so rapidly to the request I made on 10th January for this matter to be put right. I raised the matter with him as long ago as 16th December, when he was unwilling or unable to put it right. Therefore,


the previous Bill eventually found its way on to the statute book in its incorrect form.
The hon. Gentleman spoke of delay and his wish to have all stages of the Bill completed this evening. That could have been done if the Government had tabled the usual motion that amendments could be tabled before Second Reading. Because they did not do so, amendments could not be tabled and we must now deal with them on another day. The responsibility is the Government's because of the way in which they prepared the Order Paper.
In a few minutes I shall tell the House what amendments I think to be necessary. First, however, because of the way in which the Minister moved the Second Reading, I wish to say that it is an absolute disgrace that the matter should come to us at all. The hon. Gentleman cannot shuffle the responsibility off to Officers of the other House. The error arose simply because of the way in which the Government have sought to pressure legislation through both Houses.
The Act whose amendment we are considering went through Committee in an orderly fashion. There was no need for any special sittings motion. There was no filibustering. But the Government found it necessary to move a guillotine motion because they were in such a panic over their legislation just before prorogation. That is the beginning and end of the trouble we are in today—the unseemly haste with which this legislation was forced through both Houses, with the result that we were not able to give the previous Bill and the amendments proper consideration.
I am certain that were it not for the guillotine, if we had been given adequate time to study the Lords amendments and compare them with the text of the Bill, which is our normal practice in these matters, the error would have been discovered earlier. It was discovered on 16th December, before the Act was published, and I feel sure that steps could have been taken then to rectify the matter.

Mr. Armstrong: If the hon. Gentleman wants to convince the House that the mistake was due to the pace at which we dealt with the amendments from the

other place, would he like to cite the Local Government Act, on which under the previous Government two amendments made in another place were not reported here? Would he like to explain how that happened?

Mr. Rossi: That was put right in a short space of time. One could also ask why, under this Government, there was the mistake in the Children Act 1975.
It follows that whenever Governments unduly overload the parliamentary timetable it is likely that mistakes of this kind will occur. We should put the matter right, in my view, by looking at our procedures. The Renton Report, which was approved by the House two years ago, is still before us and the Government have taken no action on it. If we had had the procedures recommended by Renton, there would have been a vetting of the Bill before it received Royal Assent, and certainly before it was published as an Act, and we should not have to be here tonight discussing an amending Bill.

Mr. Dennis Skinner: Will not the hon. Gentleman acknowledge that the error was first perpetrated in the House of Lords, whose job, we are constantly told, is to act as a revising Chamber, to insert the commas, to get the figures right and to cross the "t's"? Is it not a fact that the Lords, without a guillotine, were so concentrating their attention on wrecking the Bill that they forgot to do the job they were supposed to do, namely, to revise the Bill and make sure that it was watertight?

Mr. Rossi: As the Minister has said, this was the Government's own amendment, tabled in their own way, and there was a clerical error. One would have expected the great battery of civil servants at the disposal of Ministers to check the error. Moreover, why was the matter not checked in our House when the amendment came here? I do not think that it is a fruitful exercise to start attaching the blame to one paid official or another.

Mr. Nicholas Winterton: Could my hon. Friend explain the reason which the Minister gave for not taking action when the error became apparent on 16th December—that is, when my hon.


Friend drew the error to the Government's attention? Why was action not taken before the Act was printed?

Mr. Rossi: The Minister has taken the view that the responsibility was that of the Clerk of the Parliaments. Unhappily, the Clerk of the Parliaments was put in a very difficult position. He had three options open to him for dealing with the amendment, but he was under tremendous pressure to get the Bill passed through the necessary processes so that the Government could have their first appointed day on 1st January 1977. That is the reason for it. Everybody was under the greatest pressure because of the Government's indecent haste.
Having said that, I pass now to other matters which are possibly of fundamental importance. The mistake here, however it arose, resulted in this state of affairs: we had a Bill passed in one form in the House of Lords, a Bill passed in a different form in this House, and a Bill which eventually received Royal Assent in a form passed by neither House. This raises a question of some constitutional importance.
As hon. Members know, the preamble to every Act of Parliament reads:
Be it enacted by the Queen's Most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows".
We are here dealing with an Act which was not enacted with the consent of the Lords Spiritual and Temporal or by the Commons in this Parliament assembled, because the Lords Spiritual and Temporal passed the Bill in one form, the Commons passed it in another and Her Gracious Majesty gave her Assent to an entirely different Bill altogether. Immediately, therefore, on the face of it there is a fundamental imperfection in the Rent (Agriculture) Act 1976.
I know that the Government do not wish to follow the consequences of that too far. If they were to do so it might mean that they would be placed in difficulty with other legislation in which there are similar imperfections. One of these measures is the Children Act, to which I have already referred.
This matter could be cured easily by the House, not by simply amending the Act as this Bill proposes, but by including a clause validating the Act and suggesting

that it takes effect from the date the first Act received Royal Assent as amended by this Bill. That would remove any doubt whatsover. That is one of the amendments I would have wished to discuss tonight, had the Government put down a motion on the Order Paper enabling me to table that amendment before Second Reading. They did not do so, and I was not able to table the amendment. We can deal only with the Second Reading, and the Bill will be delayed while a Committee is constituted to consider it. That delay is the responsibility of the Government because once again they did not get their procedures right.
On 10th January I referred to "Erskine May", which deals with the question of lack of consent. It would be as well to remind the House what "Erskine May" says, on page 570:
If a Bill should receive the Royal Assent without the amendments made by one House having been communicated to the other and agreed to, serious doubts naturally arise concerning the effect of this omission; since the assent of the Queen, Lords and Commons is essential to the validity of an Act, except where the provisions of the Parliament Acts 1911 and 1949 are enforced in relation thereto.
That goes to the very heart of the question that I raised in opening this discussion—namely, the imperfection of the Act, having been passed in one form with one amendment in one House, having been passed in another form with a different amendment in the other House, and receiving Royal Assent in a third form with no amendment at all.
On this matter "Erskine May" is quite clear. Doubt exists as to whether the Rent (Agriculture) Act 1976 is valid or not—

Mr. Bruce Douglas-Mann: Nobody would deny the hon. Member his delight in the procedural defect that he has discovered, and of course we acknowledge his achievement in getting us here this evening. But is it his intention—it would certainly appear to—that county court judges should be encouraged to make eviction orders against tenants of agricultural properties for which possession is being sought by their owners, by reason of an unfortunate but none the less real defect that he has discovered? The hon. Member has taken great pleasure in the procedural deficiencies of the Bill. Will he


take the political responsibility for the events which are likely to result from the successful delaying of this measure?

Mr. Rossi: I am not seeking to do that. With great respect to the hon. Member, for whom I have considerable regard, he is being a little facile. I am raising a substantial constitutional matter, and it lies in our hands to put it right rapidly. Therefore, the question of eviction need never arise. That depends on the will of the Government to recognise that the problem exists and to put it right as quickly as possible.
I submit that an amending Bill by itself is insufficient. The Bill should go a little further and validate. That is simply a matter of wording. The speed of that is a matter for the Government. I am not seeking to have people evicted, but I want the matter right and I want to ensure that as a result of this example the situation need never arise again. Again, the remedy lies in the hands of the Government. They should evolve our procedures in such a way that there are certain checks in the hands of this House and of the other place to ensure that mistakes are put right, as the Renton Committee recommended should be done two years ago but which the Government have failed to carry out.
"Erskine May" is regarded as sufficient authority. It makes it clear that where there is a lack of consent the gravest doubts arise as to whether an Act is valid. It goes further and states a number of examples where Parliament has found it necessary in the past, where this situation has arisen, to pass a validatine Act.
I am asking only that we pass a validating Act in accordance with the requirements of "Erskine May". If, however, the Minister will not accept "Erskine May" and relies on other precedents, it is necessary for me to take the House through other authorities to see what the situation is in law as far as we can ascertain it. I think that I can do no better than start with Maitland's "Constitutional History of England". It is a very respectable source for considerations of this kind. Maitland is the eminent jurist to whom constitutional lawyers have repeated reference.

Mr. John Ellis: The hon. Member has referred to a validating Act. Is he maintaining that the Bill before us is insufficient to put right any matter and that he wants another Act to secure that?

Mr. Rossi: No. All that is required is to insert in the Bill before us the words
The Rent (Agriculture) Act 1976 shall be amended as provided by this section and shall be deemed to have had effect as so amended from the date it received Royal Assent.
That would validate the original Act.

Mr. Armstrong: If the hon. Gentleman is making such a fuss about validation and so on, why was the mistake in the Local Government Act 1972 not put right by a validation Bill instead of that Act being amended in exactly the same way as we are proposing to amend the Rent (Agriculture) Act? Why is validation necessary now when it was unnecessary then?

Mr. Rossi: It could be that if that Act was not put into the correct form doubts could arise and it might have been necessary to have validation. I was not personally concerned with that legislation, but I am concerned with this matter. Having spent so much time on the Act in this instance I want to see it in the correct form on the statute book with no doubt attaching to it.
As for the remainder of our legislation, if the Government feel that other Acts require treatment it is a matter for them to bring forward legislation to provide that treatment. I am seeking to adduce to the Government the authorities for the proposition I am advancing tonight. I hope that they will not be so stubborn as to refuse to accept the innocuous lines I have read out. What would it cost them to make this insertion in the Bill? We shall argue that later in Committee, but on the Floor of the House it behoves me to put on record the constitutional precedent that exists as I see it.

Mr. Douglas-Mann: Will the hon. Gentleman explain how the effect of a validation Act would differ from the effect of the present Act, bearing in mind that the principal effect of the amendment is to impose a duty to deal with the matter within three months of receipt of an


application or within two months of the receipt of the committee's advice? The Act has been in force for only five weeks, and the need for retrospective validation is totally irrelevant, as I hope the hon. Gentleman will admit.

Mr. Rossi: That begs the question. The question is, when is an Act of Parliament an Act of Parliament? That is what I am arguing. We must consider whether the 1976 Act is an Act of Parliament. If it is not, or if there is doubt that it is—I am saying no more than that—let us put it right. Let us remove all doubt. That is all I am asking the House to do.
I cannot begin to understand the attitude of the Government, who refuse to say "If a doubt exists in anyone's mind, let us try to put it right." I shall refer to the authorities, and we shall see whether a doubt exists. The Under-Secretary of State keeps shaking his head at me to indicate that he considers there to be no doubt. It seems that he has set himself above "Erskine May". I congratulate him that he now considers himself a greater authority than "Erskine May". However, he will find that he is in a minority. No one else would accept him as an authority above "Erskine May". I have referred to "Erskine May" and the language is clear. I did not wish to detain the House so long, but the interjections from Labour Members have required me to make courteous answers. Maitland's "Constitutional History of England" states at page 381:
But the chief function of parliaments is to make statutes. We have observed the history of the legislative formula; for two centuries it has been accurately preserved, 'Be it enacted by the king's most excellent majesty by and with the advice and consent of the lords, spiritual and temporal, and commons in this present parliament assembled and by the authority of the same.' The essence of the statute seems to be the concurrence of the king, the House of Lords and the House of Commons.
Some procedural matters are then dealt with which I can skip.
Maitland continues:
A court of law, we may safely say, would never go into the question whether an act has been passed in disregard of the usual formalities. The furthest that it would go would be to insist that the whole act had received the consent of the king, lords, and commons; it would never for example permit

the question to be raised whether a bill had been read three times—the rule which requires three readings, ancient and punctually observed though it may be, is no rule of law. On the other hands the assent of the king and the two Houses to the whole act in its ultimate form seems essential. Some delicate questions might arise as to this in case the officials of the House made mistakes. Suppose a bill carried through the House of Commons; the lords make amendments in it; it ought then to go back to the commons in order that they may consider whether they will assent to the bill thus amended. But suppose that this step is omitted; that the bill is then presented to the king and that he gives his assent. Is this bill a statute?
I interpose to make the supposition not that the step is omitted but that the Bill comes back in a form different from that passed by the Lords, that the Commons then passes it in a different form and that it is then presented to the King in a form passed by neither House.
As Maitland asks,
Is the bill a statute?
Maitland states:
I take it that it is not; but the question how far a court of law would hold itself bound by a statement on the bill that it had received the assent of king and both Houses, whether it would permit a litigant to dispute this statement, is a somewhat difficult question. Such mistakes have occurred more than once in the present reign. Thus in 1844 there were two Eastern Counties Railways bills in parliament; one had passed all its stages, the other was still pending in the Lords, when by mistake the queen expressed her consent to the latter instead of to the former. The mistake was discovered, and another act was passed declaring that the Bill to which assent had been given should not be deemed to have received the royal assent. Other mistakes of a similar kind have been similarly corrected. I may explain that a vellum copy preserved in the House of Lords is the ultimate evidence of a statute. Perhaps a court of law would allow a litigant to prove that as a matter of fact this document had never received the consent of king, lords and commons; but I am not sure of this.
Therefore, Maitland is not sure of the situation.

The Solicitor-General (Mr. Peter Archer): I do not want to turn this debate into an exchange of lawyers' technicalities. If, however, the contention was that the Bill was invalid, why was it necessary to pass an Act deeming that it had never received Royal Assent?

Mr. Rossi: The wrong Bill received Royal Assent, so it had to be deemed as not having received Royal Assent, and Parliament then proceeded to pass the Bill which should have been passed.

The Solicitor-General: Then it must have been valid.

Mr. Rossi: Maitland raises the important question whether the vellum, the record—[Interruption.] Vellum, which is not printed on mauve paper.

Mr. Nicholas Winterton: Lavender.

Mr. Rossi: Lavender paper. Maitland raises the important question whether the vellum is the ultimate authority. But it is a matter of evidence, and no more than a matter of evidence, and matters of evidence are matters for the courts to review whenever they wish.
A curious situation arises regarding the vellum of which I should inform the House. During the Christmas Recess, when this matter was receiving my attention, I called at the House of Lords and asked to see the vellum. I was there on 31st December. There was no vellum. It could not be produced to me. Yet the Queen's copy had been published on 22nd December, according to the Minister. That raises serious consideration as to whether the Queen's copy, as published and as in Her Majesty's Stationery Office, had the full authority of law when the vellum upon which it was supposed to be based was not in existence. That is another defect caused by the unseemly—indeed, indecent—haste with which the Government pressed through this legislation and created difficulties for the clerical officers of both Houses.
The question of the importance of the role of the House of Lords has received attention by other commentators on our constitutional law. I refer the House to "Craies on Statute Law", Seventh Edition, page 38:
It is submitted that the courts, in an ordinary case, would regard the existence of an enrolled copy amongst the records of Parliament (or Chancery), purporting to be duly assented to, as conclusive outside Parliament itself, and would decline to enter upon any inquiry into the contents of the Journals or into the usages or resolutions of either House, except so far as they purport to alter the common statute law.
Once satisfied of the authenticity of an Act, the judges would be bound to take judicial notice of its contents, and as it is not permissible to refer to debates in Parliament in explanation of the meaning of an Act, so also it is no part of the judicial office to scrutinise the contents of the Journals of either House or the drafts of Bills to see whether the Act in question had properly received the assent of the legislature.

That is a formidable argument against the case that I seek to make to the House.
But Craies goes on to say:
If a serious question were raised as to the validity of an Act, it is possible that the judges would adjourn the proceedings in which it arose until Parliament had an opportunity of settling the question by a fresh Act, as was done in Pylkington's case in 1450".
Again, the hallowed precedent of our constitutional law indicates that these matters have to come back to Parliament and be put in their correct form. I suggest that the Bill is not putting the matter strictly in its correct form. The reason for that is that if the law of consent between the House goes to the root of the enactment, it raises serious questions about validity.

Mr. Nicholas Winterton: Before my hon. Friend further strengthens his powerful case, will he indicate whether he has prior notice from the Government that they are not prepared to accept his proposal to validate the Bill? Although I am fascinated by my hon. Friend's case, many hon. Members might wish that they were elsewhere, so I hope that the Government will accept his argument.

Mr. Rossi: I have corresponded with the Minister. He indicated that validation was not necessary. That causes difficulties, because if he admitted that it was necessary other Acts would have to be treated in the same way.

Mr. Douglas-Mann: I presume that one of those Acts might be the Local Government Act 1972. The hon. Member has cited authorities that totally repudiate his case. Perhaps he will spare us yet further authorities which I see he has beside him. Will he explain whether, with the possible exception of Pylkington in 1450, the established law is that, once the Monarch declares a statute Le Roy le veult, that is the law and from that moment it is valid. There is no authority that would refute assertion that the Act is then valid. The hon. Gentleman's argument about validation is totally irrelevant and a waste of time.

Mr. Rossi: If the hon. Member had listened carefully to my quotations from Maitland and Craies, he would find that they did not refute my case. In fact, they support my argument that there is an


area of serious doubt. I put it no higher than that. There is an area of serious doubt about whether, under the constitutional law of our country, an Act can be an Act if it has not received the full and complete consent of both Houses of Parliament, save where the Parliament Acts apply.

Mr. Armstrong: If I thought that there was any chance of invalidating the Local Government Act 1972, I should be only too ready to receive advice and act upon it.

Mr. Rossi: It is a matter entirely for the hon. Gentleman what he does with other legislation. I am concerned simply with making the case on this Act. I hope that the hon. Gentleman will listen to it with an open mind and not a closed mind, because it raises a serious matter that we could readily put right. What I do not understand is his reluctance to put it right.
Craies refers to Pylkington's case, which is an old case but it is, again, relevant to our consideration. I should like to refer the House to this case because of the clear doubts tht obviously exist in the minds of Labour Members whether or not this is a correct submission that I am putting to them. The case of
Sir John Pylkington was brought before the Exchequer Chamber in 1454–55. By a special 'Act of Parliament' passed in the Spring of 1450, John Pylkington was required to appear on a charge of rape. He refused to do so, and challenged the validity of the 'Act'. His Counsel pointed out that the Bill, as it passed the Commons, required 'that the said John surrender himself before the feast of Pentecost next ensuing', whereas as it passed the Lords, he was to appear before the feast of Pentecost which shall be in 1451.' It was argued that 'because the Lords granted a longer day than was granted by the Commons, in which case the Commons ought to have the Bill returned to them and assent to the grant of the Lords but it was not so; wherefore the Act seems void.'
The Court heard evidence from Fauxes, the clerk of Parliament, who explained how the discrepancy arose. According to his account, the Bill was introduced in the Commons after the feast of the Pentecost in 1450 with the intention that Pylkington should appear in 1451, but because at that time every Act was dated as of the first day of the Session (which was before the feast of the Pentecost), the Lords inserted 1451 to make the Bill conform to its true intent.
After hearing argument, the judges sought the opinion of Kirkby, the Master of the Rolls, who thought that the Act was void, and a majority of the Court …shared this view.

Fortesque C.J. was more cautious. He apparently thought that the Act was valid because it had been certified by the King's Writ to have been confirmed by the authority of Parliament.
This is the point made by the hon. Gentleman a moment ago.
'This', he said, 'is an Act of Parliament and we wish to be well advised before we annul any Act made in Parliament and peradventure the matter should wait until the next Parliament until we can be certified by them of the certainty of the matter.' Unlike his brethren, he would not say that the Act was void, but it will be observed that he was not prepared to enforce it without 'more certainty of the matter'.
In that case, therefore, the courts took the view that the matter should come back to Parliament so that it could be validated and the assent could be given in the correct form by both Houses before Royal Assent was given.

Mr. Douglas-Mann: Who was purporting to be the Monarch at that particular time? Was there any challenge as to the status of the Monarch?

Mr. Rossi: No, not in that case.

Mr. Nicholas Winterton: Hear, hear. Divine right. [Interruption.]

Mr. Deputy Speaker (Sir Myer Galpern): Order. We do not want tempers. I think that we should leave the old gentleman in 1450 and his alleged act of rape in peace and quiet.

Mr. Rossi: The report of the case that I have given to the House is to be found in the "Modern Law Review" of July 1953, in an article written by Professor Cowen. He deals earlier in his article with the proposition that I am putting to the House. At page 274 he says:
To say that an English court cannot treat an Act of Parliament as void is undoubtedly true, but does not end the matter; for it leaves unanswered the question"—
it is the question that I am putting to the House—
What is an Act of Parliament?' …It is, however, one thing to withhold from the courts jurisdiction to disregard an Act of Parliament as an excess of power, quite another to deny them jurisdiction to inquire whether a document, alleged to be an Act of Parliament, is an authentic expression of Parliament's will. And English law, it is submitted, makes no such denial. On the contrary, the cases show that the question is not whether the courts may inquire into the authenticity of an alleged Act of Parliament, but rather the extent to which


they may do so. What is the effect of the Royal Assent, of the enacting clause, and of the fact of enrolment? To what extent does the Royal Assent cure irregularities in the passing of a statute? Is enrolment conclusive of authenticity?
All those questions posited by the learned professor are totally relevant to the problem before the House, and he concludes by saying:
These have been—and still are—the critical questions, and they are surprisingly difficult to answer with any assurance.
Therefore, I am surprised that the Government should have such assurance on this matter.
There we have the whole question argued very closely by an authority on constitutional law, where he comes to the conclusion that one cannot be assured of the answer to these very difficult questions. It is because one cannot be assured that I am asking the Government to put the matter right by two very simple sentences. I cannot understand why they are refusing.
Perhaps the nub of the matter is whether a court today would look at an irregularity, and the Minister referred me to the case of the British Railways Board.

Mr. Ted Leadbitter: We have been following this rather interesting survey of Craies and others. Will the hon. Gentleman consider this as a reasonable observation? We have before the House of Commons tonight a Bill entitled Rent (Agriculture) (Amendment) Bill. I should have thought that, as a matter of elementary definition, we have before the House a separate Bill, a Bill which is an amendment to an Act of Parliament, the larger part of which the hon. Gentleman has questioned in terms of its validity.
If the hon. Gentleman wants to question a statute passed last Session, does he not think that this is the wrong place and time to do that? Is it not a fact that we are dealing with a separate Bill which has a title of its own and is an amendment to an Act of Parliament? If the hon. Gentleman is questioning the validity of an Act of Parliament passed last session, I should have thought that he would be more in order if he were to raise the matter at a different time and place. I submit that we are dealing with a separate Bill.

Mr. Rossi: The hon. Gentleman has referred to me the question of whether I am in order. This is, of course, a matter for the Chair.

Mr. Deputy Speaker: It is not for the hon. Member for Hornsey (Mr. Rossi) to answer that question. The hon. Member for Hartlepool (Mr. Leadbitter) has asked whether the hon. Member is in order. There is no doubt that he is in order, but there are limits to what is in order.

Mr. Douglas-Mann: Further to what appears to have been a point of order, Mr. Deputy Speaker. Is it in order for an hon. Member to challenge the judgment of Her Majesty in giving her assent to an Act which has received the assent of both Houses, whether or not it contains a clerical error?

Mr. Rossi: rose—

Mr. Deputy Speaker: Order. I might as well, from the Chair, get a little fun out of this also. The hon. Member for Hornsey is absolutely in order. He is giving reasons—although, in the minds of some hon. Members, rather lengthy reasons—why it has become necessary to produce this Bill for its Second Reading.

Mr. Rossi: Thank you, Mr. Deputy Speaker. Indeed, I am going further. What I am saying—I believe this to be in order—is that the Bill is insufficient in its present form to do the job which Parliament requires. I am making suggestions about how the Government could better deal with the matter and am trying to persuade them so to do. I am certainly not trying to impugn Her Majesty's judgment in these matters. I do not know what representations were made to her when the Bill was put before her for her signature. I do not know whether she was told "This is an Act which has not been passed by both Houses of Parliament. You are being asked to sign something entirely different from what was passed by either the Lords or the Commons". But, certainly, what she signed was not what was passed by either the Lords or the Commons.
The Minister has referred me to the case of the British Railways Board v. Pickin in 1974 Appeal Cases, page 765. In that case a litigant sought to impugn the validity of an Act of Parliament on


the basis that it was obtained by a fraud. The courts decided that they were not entitled or were not prepared to look into the proceedings of Parliament to see how the Act came to be in existence.
In this connection, one must refer to Halsbury, Vol. 36 of the Third Edition of Halsbury, which was referred to in Picking's case, is the basis of one or two of the judgments given by their Lordships in the House of Lords. Paragraph 560 says:
The legislative supremacy of Parliament implies not only the inability of the courts to question its power to enact any particular statutory provision but also their duty to give effect as statutes only to enactments answering that description. It follows that the courts can become concerned with the question whether a particular document which they are invited to apply has received the consents necessary to constitute it an Act of Parliament. The courts would not, for example, give effect to a document appearing on its face to have been agreed by the Lords and Commons alone. In statutes passed since the latter part of the fifteenth century, the giving of the necessary consents is, however, recited in the enacting formula, and the question of sufficiency of consent has arisen only in relation to earlier documents containing no such recital, and must in practice be taken to be confined to such documents.
While the question of sufficiency of consent may be open to the courts, that of regularity of consent is not.
The question of sufficiency, according to Halsbury, is open to the court.
Halsbury continues:
If a Bill has been agreed to by both Houses of Parliament, and has received the royal assent, it cannot be impeached in the courts on the ground its introduction or passage through Parliament, was attended by any irregularity, or even on the ground that it was procured by fraud.
That is begging the question, but Halsbury leaves open the question whether there is sufficiency of consent.
This is the heart of my argument. Has there been a sufficiency of consent where, albeit because of a clerical error, the occasion was a clerical error which nobody saw in due time? Nevertheless, was there consent in one House, which was one thing, and consent in the other House, which was quite another thing. In other words, is that a sufficiency of consent?
According to Halsbury, the matter is to be put no higher than one of doubt. If it is a matter of doubt, are we under a duty to put it right? We have seen what Professor Cowen said on this matter. He

recited all the questions that apply directly to our situation, and in answer to every question he has come to the same conclusion.

Mr. Douglas-Mann: Will the hon. Gentleman confirm that in the Pickin case the court declared that all the authorities to which he has referred hitherto were irrelevant and that the court was not prepared to inquire into the matters into which he has asked the House to inquire?

Mr. Rossi: Maitland was not considered—

Mr. Douglas-Mann: What about Hals bury?

Mr. Rossi: Halsbury was considered. Halsbury supports the proposition that the court will not look into procedures where an Act of Parliament has been produced by fraud. The court was not concerned with the question of sufficiency of consent, which is the question before the House this evening. The court did not direct its mind to that aspect. We are left, as the "Modern Law Review" said, with these questions which
have been—and still are—the critical questions, and they are surprisingly difficult to answer with any assurance.
Let us assume for the purpose of argument that a Bill lacks consent, in the way we know that the Bill in question lacked consent, that it has received Royal Assent, albeit in an entirely different form from the form in which it passed through each House of Parliament, and that it was entered in the roll of Parliament in the form in which we now have it. Let us also assume that the courts say—as a matter of the rule of evidence, not as a rule of substantive law—that they will not look beyond the vellum, the Act enrolled in the courts. I have already indicated that the vellum is suspect because it was not in existence at the right time and came into existence ex post facto.
It is a question of what Parliament should do, not of what the court should do, now that the matter is before us. Should it, or should it not, be prepared to give the necessary validity to the Act? I urge the Government that it should do so. I hope that the Solicitor-General will subsequently have an opportunity of looking at these authorities and, perhaps when we reach Committee stage, will be


able to tell us the view he has formed on this matter, which, I suggest, is a question of some considerable importance to the House.
Apart from that, I ask the Solicitor-General, as a senior Minister of the Government, to look once again at the Renton Committee's report, because these matters could be readily dealt with by a Joint Committee of both Houses scrutinising Acts once they had passed all stages and curing, with the authority of Parliament, any errors that were seen to arise. Otherwise we are left in the unfortunate situation, that officials of the Lords can take it upon themselves to decide what should or should not appear in a printed Act of Parliament. That is what has happened in this case. I cannot see that that is a desirable situation. We had a measure amended in one form in the Lords and amended in another form in the Commons. The intention of Parliament was perfectly clear. It was that a time limit should be imposed upon local authorities in coming to a conclusion about a certain matter.
An official, after all the debates in Committee in both Houses, took it upon himself to exclude from the Act something that both Houses wanted included. The extent to which officials should have the power to do that is a matter of concern to us. Should we not require them, when they discover an imperfection—an irregularity that goes beyond a mere clerical error or a typing misprint but something which goes to a substantive part of the Act—if not to come back to both Houses, at least to come back to some Committee of both Houses to receive proper and due authority for the way in which the Act is published? Should we not assume and have ultimate responsibility for the Act as published, or should we leave substantive matters of this kind to be dealt with by officials to use their own discretion as to what to leave out or put into an Act?
There is one other matter I wish to raise on the form of the Bill. Clause 1 (2) states that the time limit contained in the Bill shall not apply to applications received by a housing authority before the coming into force of the Act. This is a minor point but it leaves an open-ended situation as regards the time limits where an application was made before the

Bill became law. If we consider it right that there should be a three-month time limit, I accept at once that it would be unreasonable that the three-month time limit should be deemed to run from the date of the application when the previous Act did not impose that time limit.
What we should at least say is that where existing applications are outstanding the three-month time limit should begin to run from the date we pass this measure. An authority might gain a few weeks in the period between 1st January and the passing of the measure. But we should not leave it completely open-ended without a time limit, which is how the Bill would leave things. That is a further matter I would have liked to be able to raise if we had held the Committee stage this evening, if I had been given proper opportunity by the Government.

11.20 p.m.

Mr. John Ellis: I shall be brief, but it would be sad if the speech by the hon. Member for Hornsey (Mr. Rossi) were not commented on. The intention of the Government in the Act, though opposed, was to give security of tenure to farm workers when they lost their jobs. That was what the Act was about. It is a matter of great concern. People talk of Parliament being brought into disrepute, but we have seen tonight an opportunity for saying that we are being brought into contempt. Is this a matter of great constitutional significance? We have been at this debate for an hour already. Most hon. Members have gone home, yet the hon. Gentleman has the audacity to make a song and dance about a clerical error that is not disputed and about a simple Bill which is brought in to put it right.
The hon. Gentleman, in the midst of a series of quotations, referred to this as a serious matter. But it is in reality a minor detail of a local authority replying to a message in a way that most local authorities would do anyway. The substance of the Act is not at issue.

Mr. Rossi: I accept that the original error was a silly little slip, but there is a matter of principle here which could arise on other occasions, with more significant slips. The question is whether lack of consent between the Houses is


something to which we should have regard, and whether we should use this chance to put our procedures right in order to ensure that such a thing does not happen again. I thought that, by raising the matter as I did, something of that kind could emerge.

Mr. Ellis: I am sorry, but I cannot accept what the hon. Gentleman says. He is a lawyer by training—slick, making his way in politics and seeking to emulate the feats of some of his hon. Friends when they got hold of what they regarded as points of substance. I believe that the hon. Gentleman worked away at this matter industriously but came up with nothing at all. He might, therefore, have had the grace to accept the Bill in that spirit.
I have with me a photostat copy of the Estates Gazette of 8th February 1977 advertising a book written by the hon. Gentleman about the Act. The advertisement says:
This work presents a comprehensive view of the far-reaching provisions of this new Act, whose main purposes are to provide security of tenure for certain agricultural workers and ex-workers who, because they occupy 'tied' dwelling-houses, are not protected by the provisions of the Rent Acts and to place a duty on housing authorities to re-house ex-agricultural workers where stipulated conditions are met.
It comprises a general commentary giving an overall appreciation of the purposes, provisions and practical application of the Act; a detailed commentary on each individual section of it and its 9 Schedules and the complete text of the Act as passed by Parliament.
To be published shortly; approximately £3.50 by post.
The hon. Gentleman, therefore, has something of a vested interest. I do not make that charge in a serious way. He is a professional lawyer who writes books. He wrote one about the Act. I wonder whether he will produce another book consequent to this debate. Presumably it will cost about £7 with all the issues he has raised.

Mr. Tony Newton: On a point of order, Mr. Deputy Speaker. It appears to me that the clear implication of the remarks of the hon. Member for Brigg and Scunthorpe (Mr. Ellis) is that my hon. Friend the Member for Hornsey (Mr. Rossi) is embarking on this argument for financial gain. If you share my view that that is the implication, will you not agree that it is deplorable?

Mr. Deputy Speaker: I have had to listen for the whole period of the contribution of the hon. Member for Hornsey (Mr. Rossi). I do not think that the hon. Member for Brigg and Scunthorpe (Mr. Ellis) has made any such allegation. I do not think that it is implied that it was done for gain. I do not think that I heard the hon. Member for Hornsey declare any interest in this matter, but it seems to me that there may have been some interest.

Mr. Rossi: I am grateful to the hon. Gentleman for his commercial plug. I did not seek a commercial plug for myself. It so happens that I discovered this matter when I was in the course of preparation of my particular work. It is something that I have done from time to time. It is known that I write textbooks on matters of recent statute. I do not think there is any conflict of interest between my writing a textbook on an Act of Parliament and my raising a constitutional point—I think a valid one—on that Act. Indeed, it is against my interest, because if I am right, and the Act is not validated, the book is not worth the paper on which it is written.

Mr. Ellis: I was not seeking to make that point. I was seeking to say that one of the things that brings this House into disrepute is when hon. Members go on and on. I indict lawyers generally. I believe that the hon. Gentleman has trespassed on the good will of the House by going on at such great length.
I am a straightforward sort of person and I believe that the hon. Gentleman ought to have declared that he had written a book. I would have thought that he had a vested interest in seeing the Bill go through quickly, otherwise the 3·50p is invalid as well. If the hon. Gentleman has a vested interest, it is along the line that he will publish another book.
I still say that the Bill is of enormous significance to a lot of agricultural workers. A lot of people have been engaged on this for a number of years. I believe that the hon. Gentleman has put up a lawyer's performance tonight. I hope that very few people in the country will read our doings this evening, because I do not believe that they will reflect any great merit on the serious business that we are about. I have a sense of humour.


The hon. Gentleman could have made his point in a sort of witty fashion and not gone on at such great length.

11.28 p.m.

Dr. Alan Glyn: My hon. Friend the Member for Hornsey (Mr. Rossi) has done a great service to the House. It may be that it is a minor matter on a very important Bill, but that is not the point. The point raised by my hon. Friend concerns the whole validity of the Bill. What my hon. Friend said was that every statute which is enacted has to be enacted in the same form both in the Lords and in the Commons and has to be given Royal Assent in that form and a vellum copy has then to be placed in another place.
What we are considering is whether an Act itself is valid and, if it is not, the best way in which such matters can be dealt with in future. It is important for the House to scrutinise these matters and to make sure that they are properly aired.
I pay tribute to my hon. Friend for the way in which he has presented the case. I have no doubt that the Solicitor-General will produce many other arguments. The point at issue, however, is whether Royal Assent in itself makes a Bill legal or whether it has to go through all the stages that are laid down and be passed in that form. Has the vellum copy to be deposited on the right date?
I hope that the Solicitor-General will satisfy the House on these matters and offer some suggestions on how these matters can be avoided in future or put right if such a situation should ever occur again.

11.30 p.m.

Mr. Tony Newton: I am not a lawyer, and I want to speak only briefly, having listened with interest to my hon. Friend the Member for Hornsey (Mr. Rossi). I ask the Solicitor-General to address himself to the question of what would happen if this were a more substantial point. I have much sympathy with what the hon. Member for Brigg and Scunthorpe (Mr. Ellis) said. There is obviously a strong case for the Act and a strong desire for it. There is no serious dispute about the fact that this was a trivial clerical error. But we must consider

what the position would be if it had not been only a trivial clerical error.
Let us suppose that a malicious official deliberately changes the text of an Act passed, as we think, by this House, before it receives Royal Assent. On the basis of what the hon. Member for Mitcham and Morden (Mr. Douglas-Mann) said, that would leave us with no redress. The hon. Gentleman said that once the Queen had said "La Reine le veult", that was it. It does not matter what we pass. If the Queen gives a measure the Royal Assent, that is the law. It is a strange doctrine that all that is required is the Royal Assent to make a Bill an Act after it has been processed by Parliament, regardless whether the text is that passed by this House.

Mr. Douglas-Mann: I accept the point that the hon. Gentleman is making. If the hon. Member for Hornsey (Mr. Rossi) had made it in three minutes there would have been a great deal of agreement, but unfortunately the manner in which it was made has destroyed the essential validity of what was a sound point: that it is possible for Parliament to be misled in this way. But we have the mechanism to correct the position, and that mechanism is being operated tonight. Sand has been thrown in the mechanism by the hon. Member for Hornsey, and, therefore, there is impatience. It would have been a great deal better if the House had been given an opportunity to correct the matter speedily and properly, as it should have been.

Mr. Newton: That may be so, but it confirms rather than denies what I am saying. The hon. Gentleman, himself a lawyer, spoke of the essential validity of the point my hon. Friend made. I could not have raised it because I have not the expertise, but I think that there is a genuine point to be answered—namely, what would be the position if this had been done deliberately, with malicious aforethought?

Mr. Leadbitter: The hon. Gentleman must not introduce a hypothetical situation. It is not relevant. What is relevant is that the hon. Member for Homsey (Mr. Rossi) did not say what was in "Erskine May". It states that there has never been a court decision on this matter. According to part of page 570 of "Erskine


May" which the hon. Gentleman did not quote, only twice has Parliament considered it proper to make some amendments.
"Erskine May" says something else that has not been mentioned. According to "Erskine May", these informalities depend on only one criterion: did the Royal Assent deal with all prior irregularities? We are not now dealing with prior irregularities. The hypothetical situation is different and irrelevant. But the hon. Member for Hornsey has made a grave omission. He took a long time to present his case and then left out these most pertinent points.

Mr. Newton: With respect to the hon. Gentleman, I think he is going back on to ground covered earlier and demolished by your ruling, Mr. Deputy Speaker. My hon. Friend was raising the issue of whether Royal Assent disposed of all prior irregularities. It seems to me that that is the issue in this debate. I have made that point as far as I can.
The only other thing I wish to point out is that it is all too easy for us to slip into taking the view—especially when we can say that we know what we all wanted to do and what the House generally agreed—"All right. We know what we wanted to do, so let us assume that it was done". There comes to my mind the trivial case of the 30 m.p.h. speed limit. It was highly publicised. Everybody thought that there was a 30 m.p.h. speed limit. Motorists were fined on the basis of the 30 m.p.h. speed limit. The courts operated on the basis of the 30 m.p.h. speed limit, and everybody thought that that was what the situation was, until it was suddenly discovered that that was not what the situation was—because some idiot had forgotten to make sure that that speed limit existed. The courts had to repay all the fines.
It was silly and funny, and it gave the newspapers a story. But it is fundamental to the question of the way in which we do things. Do we decide things according to what actually has been done and what has been properly passed into law? I support my hon. Friend, because I believe that this is a fundamentally important issue. It is easy to laugh it off, but I hope that the Solicitor-General will not do so.

11.37 p.m.

Mr. Bruce Douglas-Mann: I shall not detain the House for more than a few moments. The hon. Member for Braintree (Mr. Newton) emphasised a point that, I regret to say, was wholly buried beneath the verbiage of the hon. Member for Hornsey (Mr. Rossi). But there is the point that, unfortunately, we can legislate in error and incorporate errors in legislation. It is desirble to have machinery to correct these errors quickly, but it is unfortunate that, when errors are discovered and we have to put the machinery into effect to correct them, we are subjected to an hour and 35 minutes of what is for the most part "rhubarb".
Perhaps it would be desirable for the Select Committee on Procedure to devise a means of enabling us to put these matters right speedily when errors are discovered without having to waste the time of the House—time that could be spent on much more important matters.
I congratulate the hon. Member for Hornsey on drawing the attention of the House to this question, but in future I trust that he will not persist in his objections to such an extent that it results in a delay in bringing into force legislation which even he acknowledges is important in the interests of farm tenants.

11.39 p.m.

Mr. Geraint Howells: I believe that hon. Members will agree that the weight of legislation brought before this House over the past few years by Governments of both major parties has been so great that it is only to be expected that errors such as the one that we have discussed tonight are made. It is to the great credit of the much-overworked Clerks that mistakes occur so rarely.
Rather than such mistakes being a warning against the guillotining of Bills, they are rather a warning that if we continue to have the same volume of legislative work it cannot be handled solely by this Parliament. What better argument could there be for having devolved Assemblies, separate from the Westminster Parliament?

11.40 p.m.

The Solicitor-General (Mr. Peter Archer): I am sure that the hon. Member for Cardigan (Mr. Howells) will forgive me if I do not attempt to comment on that proposal. I have no doubt that we shall hear it again.
I appreciate the feelings of my hon. Friend the Member for Brigg and Scunthorpe (Mr. Ellis). I think that the people to whom this Act applies, many of whom have been waiting to see it put into effect for a long time, will not be impressed by the constitutional process that we have been discussing tonight.
There was a time when I wondered whether I should intervene at all tonight, but the hon. Member for Hornsey (Mr. Rossi) has displayed such great industry in noticing the oversight and in his research from which we have benefited tonight, that I thought it would be a discourtesy to him if I did not attempt to state a view on these matters.
I enjoyed his speech, but I though that it was a pity that he tried to make political capital out of this situation. It is not unique, nor is it peculiar to Labour Governments. One can mention precedents. For the benefit of our discussions in Committee, I offer a few references. The hon. Member for Hornsey should look at the Official Report of another place for 22nd September 1972, columns 1514–5. He will see that amendments were moved and carried to the Local Government Bill. If he then refers to the Official Report of this House for 22nd October 1972, columns 1281–4, he will see the consideration of amendments to that Bill, with no reference to the Amendment No. 247 which was carried in another place. If he consults the statute book he will find that the Local Government Act 1972 is there, and that the amendment is missing. Finally on 4th December 1972 a Question was asked and answered about when the Government proposed to legislate on the matter which was the subject of the amendment. If he consults the statute book for 1974 he will see the Local Government Act 1974, Section 39 of which restores the missing amendment. What he will not find is any indication, in a situation that was parallel to this, that anyone tried to suggest that the 1972 Act was not valid. Perhaps that was an oversight.

But one does not make political capital out of this—it happens under all Administrations, not because of any particular legislative programme, but because officials sometimes make mistakes, and no one expects them to be perfect.
The hon. Member complained that we were not able to debate amendments tonight. I do not claim to be an authority on the Standing Orders of the House, but I understand that the fact that he intended to put down amendments was made known only last Monday. I am not blaming him for that, but apparently the rules did not permit the requisite motion to be put down after Monday.
Essentially the hon. Member for Hornsey raises the question of whether the Rent (Agriculture) Act was somehow invalidated by what has transpired—in other words, when is a statute not a statute? He and I may be advised to exchange technicalities in Committee rather than across the Floor of the House. I do not propose to delay the House long tonight.
But I am a lawyer by trade, and I have written books—none of us is perfect. I think that I should indicate the position as I see it, without attempting to follow through the details. One begins, as with many more memorable arguments, with the sovereignty of Parliament. It is the doctrine that the courts regard Acts of Parliament as conclusive of the law on the subject with which they are dealing. They do not question the validity of those Acts. The courts accept them as conclusive. Of course the courts could review their own rules of evidence, as the hon. Gentleman suggested and perhaps they might decide tomorrow that they do not regard Acts of Parliament as conclusive. But it is unlikely that they will suddenly disregard all the precedents on this doctrine. Acts of Parliament are conclusive because the courts regard them as conclusive, and it is very unlikely that the courts will change a practice which has evolved over a long period of time.

Sir David Renton,: I think that a Law Officer of the Crown should be absolutely clear about this. It has become the established convention of the constitution, and has been so for centuries, that the courts will not and cannot challenge the validity of an Act of Parliament. I hope that the hon. and learned Gentleman will make that plain.

Mr. John Ellis: That is what my hon. and learned Friend said.

Sir David Renton: There is no question of the courts under our constitution having the power, unless Parliament gives them the power, to question an Act of Parliament.

The Solicitor-General: I am most grateful to the right hon. and learned Gentleman for enunciating that. I thought that was precisely what I said. It was certainly what I intended to say. If the right hon. and learned Gentleman had listened he would have heard me refer to the argument of the hon. Member for Hornsey, who said that this was only a rule of evidence and that it was possible that the courts might change it.
I am saying that I do not know what the courts will do tomorrow. They might take leave of their senses and do something wholly unpredictable, but it is unlikely that they would. It is in that unlikelihood that the rules of law rest. That is what we mean by the rules of law. I think that the right hon. and learned Gentleman and I are saying the same thing. If the right hon. and learned Gentleman wants me to reiterate that I shall do so in the words that he used.

Sir David Renton: We are saying the same thing now, but earlier the Solicitor-General said that the courts could change their practice. They would not be entitled to do that under the constitution.

The Solicitor-General: All I can suggest is that the right hon. and learned Gentleman reads the Official Report tomorrow. I was commenting on what was said by the hon. Member for Hornsey, who, I see, agrees with me and who said that it was possible that the courts might change their practice. I am saying that anything is possible. I do not know what will happen tomorrow until tomorrow comes, but it is extremely unlikely that such a thing would happen, and it is in that unlikelihood that the law of this country resides.
Let me return to the argument. The principle of the sovereignty of Parliament has been reaffirmed again and again without qualification in this House and in the courts. It might be worth recording that the doctrine was not finally established until the nineteenth century.I

think that at that time there were those who ventured to question it and who would have been much less shocked than the right hon. and learned Gentleman. In Bonham's Case in 1610 Chief Justice Cooke said
When an Act of Parliament is against common right and reason, or repugnant or impossible, the common law will control it.
There were attempts to argue that as late as the nineteenth century and it was only finally disposed of in the famous judgment of Justice Willes in Lee v. Bude and Torrington Railway Company in 1871. So far as I know, though I have not researched it, the first academic enunciation of the doctrine as a serious constitutional principle was in Dicey's "Law of the Constitution". The reason I stress that is that some of the precedents referred to by the hon. Gentleman arose before that doctrine was finally enunciated, and unless one sees them in context it is difficult to understand why things were said, as they were said, for example, in Pylkington's case.
The second fundamental principle, which itself emanates from the sovereignty of Parliament, is the privilege of each House of Parliament to have the exclusive right to determine the regularity of its own proceedings. That rule was enunciated in the Bill of Rights in 1688, although that was reciting a rule that was already in existence. It said:
That the freedom of speech, and debates or proceedings"—
I emphasise "or proceedings"—
in Parliament, ought not to be impeached or questioned in any court of place not of Parliament.
The consequences of that doctrine are far-reaching in a number of directions. For example, there is the rule that the courts apply in construing the meaning of a statute. They will look only at the text. They will not permit reference to the Official Report of speeches made in either House to shed light on the intention of Parliament. It seems to be a necessary corollary of those two principles that there should be a clear criterion of what is an Act of Parliament and what is the text of that Act.
I am sure that the hon. Member for Hornsey—indeed, he has been kind enough to nod agreement—recognises that it would not be in the public interest if anything said here engendered the


belief that there was not such a criterion, and that what everyone thought was a statute might be open to challenge. It would not be in the public interest for two obvious reasons. First, it would not be conducive to the good relations and respect which exist between the courts and Parliament arising largely from the courts' recognition of that privilege. Secondly, it would clearly not be in the interests of anyone that the law should be anything other than clear and predictable. It would not be right that it should be thrown into doubt by confusion over whether a statute was valid. If I might add a third reason, it would be a great pity if a learned text book had to be scrapped almost before it reached the bookstalls.
That is the answer to the fundamental question that the hon. Member for Hornsey has been posing. As I understand him—I hope that I paraphrase him fairly—he is saying "Perhaps there is a shadow of doubt. If we look in all the old books there might be some doubt. Why not put the matter beyond doubt. Why not make the amendment that I am proposing? If that is done, there will not be any doubt." If we added such a clause, it would be placing in doubt precisely the principle that I am enunciating, to which I am sure the hon. Gentleman would subscribe. It would be a great pity if that principle were placed in doubt in this House. If we feel it necessary to enact it on a specific occasion in a specific Bill, it will place doubt across the rest of the statute book.

Mr. Rossi: I assumed that that was the difficulty in which the Government found themselves. The moment they accepted the principle the ramifications were wide indeed. I mentioned that to the hon. and learned Gentleman. I was putting the matter no higher than that there is doubt, and probably more than a shadow of doubt. The hon. and learned Gentleman is being a little unfair to me when he says that all the precedents I have quoted are antique. In fact, I relied on the article in "Modern Law Review" of 1953, which is the latest commentary I found on this issue.

The Solicitor-General: I was referring specifically to the Pylkington case, on which the hon. Gentleman relied, and the two cases he cited from "Erskine May".

I was not referring to the academic argument.
We come to the most recent authority, which the hon. Gentleman cited—namely, Pickin v. British Railways Board. That was reported in 1974 and the hon. Gentleman quoted from the 1971 edition of "Erskine May". I cannot predict what will be in the next edition of "Erskine May" but it may be worth reading.
In the Pickin case the headnote reads:
allowing the appeal that the function of the court was to consider and apply the enactments of Parliament, and accordingly, in the course of litigation, it was not lawful to impugn the validity of a statute by seeking to establish that Parliament, in passing it, was misled by fraud or otherwise".
I fully take the distinction that the hon. Gentleman has made. Here we are not considering fraud but a situation in which it may be that one or both Houses did not apply their minds to the text which finally emerged.

Mr. Rossi: I must correct something that the hon. and learned Gentleman has just said. The edition of "Erskine May" to which I referred is the 1976 edition. It is the latest edition and the edition that throws the whole question into doubt.

The Solicitor-General: I apologise. Clearly I do not want to take a bad point. But it still refers to two precedents of the early nineteenth century.
What seems important about Pickin v. British Railways Board is a dictum of Lord Reid. I am sure that any hon. and learned Member will know that Lord Reid—

Mr. Dennis Canavan: We are all learned.

The Solicitor General: Not all technically learned. The authority of Lord Reid stands very high in the courts of this country. Lord Reid was quoting from a dictum of Lord Campbell in Edinburgh and Dalkeith Railway Company v. Wauchope.

Mr. Rossi: An old case.

The Solicitor-General: An old case, but Lord Reid brings it up to date. Commenting on a suggestion that an Act of Parliament was inoperative, he quotes Lord Campbell:
I must express some surprise that such a notion should have prevailed. It seems to


me there is no foundation for it whatever; all that a court of justice can look to is the parliamentary roll; they see that an Act has passed both Houses of Parliament, and that it has received the royal assent, and no court of justice can inquire into the manner in which it was introduced into Parliament, what was done previously to its being introduced, or what passed in Parliament during the various stages of its progress through both Houses of Parliament. I therefore trust that no such inquiry will hereafter be entered into in Scotland, and that due effect will be given to every Act of Parliament, both private as well as public, upon the just construction which appears to arise upon it.
Lord Reid added:
No doubt this was obiter but, so far as I am aware, no one since 1842 has doubted that it is a correct statement of the constitutional position.

Dr. Glyn: Surely the hon. and learned Gentleman is basing his contention—which I am sure is probably correct—on the validity of an Act of Parliament consisting of the deposit of the roll in the other place and the consent of both Houses of Parliament and the Royal Assent. Is the Solicitor-General basing his contention purely on the document which is deposited in the other place? If so, what is the position if that document has not been deposited, as my hon. Friend the Member for Hornsey (Mr. Rossi) pointed out earlier?

The Solicitor-General: If the hon. Gentleman will wait until I get there, I promise to deal with that point. I think that it will conduce to clarify to take the argument one stage at a time.
The point about the dictum of Lord Reid, which I commend to the House, is the reference:
all that a court of justice can look to is the parliamentary roll.
That is the authentic record of proceedings in Parliament. The modern equivalent of the Parliamentary roll is the vellum to which the hon. Member for Hornsey referred.
Perhaps I may be allowed to inflict one further quotation on the House from "Craies on Statute Law" at page 45:
In 1849 the ancient system of enrolling Acts after the royal assent was discontinued. 'Two prints are prepared on a durable vellum which, after a further examination in the Public Bill Office, are indorsed with the words by which the royal assent was signified and signed by the Clerk of the Parliaments and become the official copies of the Act. One of these is sent for custody to the Public

Record Office and the other is preserved in the House of Lords …Paper prints of the Act are placed on sale to the public, and printed copies are referred to as evidence in courts of law. The original prints may be seen, when necessary, and copies taken on payment of certain fees.'
I understand that was the document to which Lord Reid was referring. The hon. Member for Hornsey has already quoted the passage which I had marked on that matter at page 36:
It is submitted that the courts, in an ordinary case, would regard the existence of an enrolled copy among the records of Parliament (or Chancery), purporting to be duly assented to, as conclusive outside Parliament itself, and would decline to enter upon any inquiry into the contents of the Journals or into the usages or resolutions of either House, except so far as they purport to alter the common or statute law.
There is a subsequent passage based on Pylkington's case but that case was a long time before the sovereignty of Parliament evolved.
Perhaps it is always rash to be dogmatic about what the courts will do in a hypothetical case but I do not believe that the courts would entertain a challenge to the authority of a statute as inscribed on the vellum by reason of events that occurred in the course of the passage through Parliament.
I turn to the question posed to me by the hon. Member for Braintree (Mr. Newton). Let us suppose that the Clerk of Parliaments had been dishonest and enrolled on the vellum something on which we were not in substantial agreement, and which bore no relation to our intention. Let us suppose, for instance, that he recorded that his own marriage was dissolved. The courts, by reason of the doctrine which is repeatedly approved in the House, would not look behind the official record, which is contained in the vellum. We must rely on the integrity and efficiency of the Clerk of the Parliaments. Of course, if he did something so unwise his own future would be in doubt.

Sir Michael Havers: I shall resist the temptation to refer to the Pickin case with which I was concerned as counsel.

Mr. Skinner: How much did the hon. and learned Member get paid for that?

Sir M. Havers: Nothing.

Mr. Skinner: Put that in the "Guinness Book of Records".

Sir M. Havers: Apart from whether the statute is valid, what is the position when an unintentional error takes place? Such an error could occur over the Finance Bill, for instance. That could have serious consequences.
The House should address itself to whether it can find some formula that will enable it to set up a committee to deal with mistakes and correct them without having to come back to the House of Commons or House of Lords. Perhaps that could be achieved by using the Statute Law Revision Committee. If all members of such a committee were agreed, there would be no need to come back to Parliament.
It is wrong to place such a burden upon the Clerk who has to decide on two conflicting accounts—one from this House and one from the Lords—either to resolve the difficulty or do nothing, as happened in this case. This is a valid argument which should not irritate hon. Members, because it is in their interests. Surely we could devise a system that would remove the necessity of coming back to the House unless there is disagreement.

The Solicitor-General: I was about to say something about that but the hon. and learned Gentleman has forestalled me. But that is not what the debate has been about. If he will forgive me, I will answer first the question of the hon. Member for Windsor and Maidenhead (Dr. Glyn).
He made reference to the matter that was raised by the hon. Member for Hornsey—the sinister affair of the absent vellum. He said that when the printer's copies were in the course of preparation, the vellum was not there. What difference did that make? That cannot be a ground for challenging what was on the vellum. Sometimes for administrative reasons printing processes are initiated of something which has not yet been authorised. Sometimes people print petrol coupons, for instance, before there is authority to introduce petrol rationing. That is a risk, because if there is no eventual authority, the printing is wasted. The answer is that the absent vellum was a red herring.
Returning to the question of the hon. and learned Gentleman, quite properly he says that there is a distinction. On the one hand, we might be considering whether the Act is valid. No doubt we shall return to this matter in Committee, but I was tempted to indicate the position as I see it. The quite different question is whether we could evolve some kind of procedure within the House to determine what the vellum should contain, so as to ensure that this situation does not arise. On that I think that we would all agree.
It was, again, an unfair political point to say that, because of some real or imagined delay in the implementation of the report of the right hon. and learned Member for Huntingdonshire (Sir D. Renton), if there was such a delay, we are in this situation. As I understand it, the situation discussed in that Committee was what should happen in the case of errors discovered before Royal Assent. I do not think that the Committee adverted to the question of errors discovered after Royal Assent. It is not the Government's fault.
All the same, it is a valid point. It is something to which the House ought to be directing its mind. I think that I would be usurping the limited authority placed in me if I attempted to pronounce on the matter tonight. My presence here, at the request of the hon. Member for Hornsey, is to advise the House on the matter of what the courts will decide faced with this statute. But the Government are sympathetic about the problem. Perhaps the hon. and learned Gentleman would leave the matter there at this stage, because clearly to discuss it would be out of order, as I understand it, in a Second Reading debate.

Sir M. Havers: rose—

Mr. Deputy Speaker: Order. The Solicitor-General has pointed out what I was about to say. This is a matter for future business and not the Second Reading of the Bill.

The Solicitor-General: I had not intended to speak for so long, but I have been interrupted a number of times.

Mr. Rossi: The hon. and learned Gentleman has attributed something to me that I do not think that I said. I did not invite him here just to give the view


of the courts. I do not think that I invited him here at all. What I was putting to the House was not merely the position with regard to the courts but also what this House should do to correct an error of this kind. I directed a great many of my remarks to that position.

The Solicitor-General: You have already ruled, Mr. Deputy Speaker, that that matter is out of order, so it would be out of order for me to reply to the hon. Gentleman. The matter can be discussed on another occasion.
As I see it, procedure is made for man and not man for procedure. There are many men and women who are concerned with the contents of the Bill. I hope that nothing that is said tonight will convince them that this House cares less about the contents of the Bill than about constitutional technicalities. Of course constitutional technicalities are important, and I look forward to the debates which the hon. Gentleman and I may have in Committee. However, what matters is that the situation should be put right for those people with the minimum of delay.

12.9 a.m.

Mr. Michael Jopling: I had not originally intended to intervene at this stage of the debate, but one of the things that have been said has prompted me to do so. I shall be as brief as possible.
I think that it is the unanimous view of the House, or virtually so, as the Solicitor-General said—I think that I quote him exactly—that those outside the House who are awaiting the provisions of the Bill will not be particularly impressed by the constitutional arguments which have flowed to and fro across the Floor of the House. That is certainly true. The debate has shown that the need for the Bill in the light of the mistake that was made in the Act has not been seriously disputed.

Mr. Canavan: Will the hon. Gentleman give way?

Mr. Jopling: Just a moment. Before I give way I must do what I did in the debates on the Act, and that is to declare my interest as a farmer and as being involved with tied cottages. Now I give way.

Mr. Canavan: No, it is all right.

Mr. Jopling: The Solicitor-General's speech was in stark contrast to some of the things that were said by his hon. Friends. I very much regret that the thoughtful way in which he made his speech contrasted sharply with the short-tempered attitude of some of his colleagues, and I do not exclude the Under-Secretary of State for the Environment from that stricture.

Mr. Douglas-Mann: Does the hon. Gentleman contrast the speech of the hon. and learned Member for Wimbledon (Sir M. Havers) with that of the hon. Member for Hornsey (Mr. Rossi)?

Mr. Jopling: I shall come to my hon. Friend's speech in half a minute.
What, more than anything else, spurred me into speaking was the tone of the speech of the hon. Member for Brigg and Scunthorpe (Mr. Ellis). He and I have known each other for many years. I hope that he will read the remarks that he made about my hon. Friend the Member for Hornsey (Mr. Rossi). He made personal remarks which I thought were most unfortunate and not worthy of him, and I hope that he will ponder those remarks when he has had time to think about them.

Mr. John Ellis: Will the hon. Gentleman be more specific and say what they were?

Mr. Jopling: I have written most of them down, but I do not want to repeat them. When he reads Hansard in the morning and sees what he said about my hon. Friend, I think that he will agree that his remarks were unworthy of him. They were cheap and gratuitous. I shall say no more about that.
The hon. Gentleman cannot have fully understood the point that my hon. Friend was trying to make. He was trying to say that we in this House stand as both the makers and the guardians of the concept of the rule of law. I do not see how the hon. Gentleman can dare to criticise my hon. Friend who was reasonably questioning whether what people believe to be the law could be challenged and perhaps brought back to this House in the way suggested by my hon. Friend the Member for Braintree (Mr. Newton), who said that if a gross discrepancy were to occur between this House and the


other place in a Bill that received the Royal Assent, the whole concept could he challenged very seriously indeed. That is the point that my hon. Friend was trying to make, and I again ask the hon. Member for Brigg and Scunthorpe how he dares criticise my hon. Friend for doing that.

Mr. John Ellis: I am a fair-minded person. In the light of what the hon. Gentleman has said I am prepared to look at my remarks, but let us clear up this matter tonight. I ask the hon. Gentleman to be specific in his criticism of me. If I was wrong, I shall say so. The hon. Gentleman must not make a vague charge against me. I am trying to think of what I said. Unless the hon. Gentleman is more specific, I cannot take the matter any further.

Mr. Jopling: I have already said that I do not intend to repeat what the hon. Gentleman said. I think that his statements were unfortunate. I shall draw them to his attention privately, and I hope that he will consider them. I shall not be drawn any further.

Mr. Canavan: The hon. Gentleman is accusing my hon. Friend of deceiving the House by making statements that were untrue. If not, will he withdraw the implication of his statement?

Mr. Jopling: The hon. Gentleman mooched into the Chamber in the middle of the debate and did not hear the statements made by his hon. Friend. I do not intend to be drawn by what he has said. [Interruption.] The hon. Member for Bolsover (Mr. Skinner) was here at the beginning of the debate, but went out, and he has come wandering in again. I do not intend to pay any attention to him.
It is no help for the Solicitor-General to tell us that other Bills may have a similar defect. The Under-Secretary of State for the Environment kept on quoting like a parrot the 1972 Local Government Act. The answer is that we ought to be trying to remove a situation where the serious doubt to which my hon. Friend the Member for Hornsey referred could be a more pointed and more challenging issue, in the way suggested by my hon. Friend the Member for Braintree.

That is something that we should consider. I welcome the fact that the Solicitor-General referred to the possibility of the House looking at this again.
I was surprised that the hon. Member for Mitcham and Morden (Mr. Douglas-Mann) should have said that the manner in which my hon. Friend made his points destroyed the validity of the argument. If he tries to persevere with that point, he might also ponder the way in which the Solicitor-General replied. No one can say that he was brief. My hon. Friend's speech caused the hon. and learned Gentleman to talk at considerable length and to repeat most of the quotations from the learned textbooks used by my hon. Friend.

Mr. Douglas-Mann: If I said that the manner of the hon. Gentleman's speech destroyed the validity of the argument, that would of course be a logical fallacy. But the manner weakened any validity it had. Of course it contained a few grains of validity, but it took such effort to discover them that some of us found our attention wandering before we found them.

Mr. Jopling: I welcome the way in which the hon. Gentleman has clarified his point of view. I also welcome what the Solicitor-General said about his feeling that the matter should be looked at again. Would he consider speaking to the Leader of the House in the near future about this and drawing his attention to what has been said tonight with a view to discussing through the usual channels some procedure to permit this matter to be discussed again? I wonder whether you, Mr. Deputy Speaker, would be kind enough to draw to Mr. Speaker's attention what has been said about the procedural difficulty with which the House has been faced tonight and which could blow up seriously in some circumstances.

Mr. Deputy Speaker: It is Mr. Speaker's practice to read every word which is printed in Hansard.

Mr. Jopling: I hope that he gets up early in the morning. I can see that we shall have considerable discussions on this point in Committee, and no doubt on Report we can pursue the arguments even further.

12.18 a.m.

Miss Joan Maynard: As someone who has probably had more to do with the original Act, and certainly more to do with farm workers, than anyone else who has spoken tonight, I must say that if farm workers were as inefficient and unproductive as this House has been tonight, we should be in a very bad way.
There is probably a constitutional point here, but it could have been made more briefly. It is this kind of debate and this kind of nonsense that bring this House into disrepute. When this group of workers first formed a union, they came up against the law and were deported.

Division No. 64.]
AYES
[12.20 a.m.


Archer, Peter
Gilbert, Dr John
Roderick, Caerwyn


Armstrong, Ernest
Hardy, Peter
Ross, Stephen (Isle of Wight)


Ashton, Joe
Harrison, Walter (Wakefield)
Sedgemore, Brian


Canavan, Dennis
Howell, Rt Hon Denis (B'harn, Sm H)
Sheldon, Rt Hon Robert


Carson, John
Howells, Geraint (Cardigan)
Sillers, James


Cocks, Rt Hon Michael
Jones, Alec (Rhondda)
Skinner, Dennis


Cohen, Stanley
Jones, Barry (East Flint)
Smith, John (N Lanarkshire)


Cook, Robin F. (Edin C)
Kerr, Russell
Spearing, Nigel


Crowther, Stan (Rotherham)
Leadbitter, Ted
Thomas, Ron (Bristol NW)


Cryer, Bob
Loyden, Eddie
Urwin, T. W.


Dempsey, James
McDonald, Dr Oonagh
Ward, Michael


Douglas-Mann, Bruce
McMillan, Tom (Glasgow C)
White, Frank R. (Bury)


Ellis, John (Brigg &amp; Scun)
McNamara, Kevin
Wilson, Alexander (Hamilton)


English, Michael
Madden, Max
Woof, Robert


Faulds, Andrew
Mahon, Simon



Fernyhough, Rt Hon E.
Maynard, Miss Joan
TELLERS FOR THE AYES:


Flannery, Martin
Noble, Mike
Mr. Peter Snape and


Ford, Ben
Penhaligon, David
Mr. Alf Bates.




NOES


NIL



TELLERS FOR THE NOES:




Mr. Nicholas Ridley and




Dr. Alan Glyn.

Question accordingly agreed to.

Bill read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

SELF-EMPLOYED PERSONS (TAX EXEMPTION CERTIFICATES)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ashton.]

12.30 a.m.

Mr. Nicholas Ridley: I have great pleasure in Mr. Speaker's selection in the ballot of the topic of the refusal of a 714 certificate to

Now, after many years of struggle to get the original Act on the statute book, we once again run into what the Opposition would like to see as a constitutional difficulty. In fact it is a clerical error. None of us is perfect. Everybody makes mistakes and we could not possibly legislate against that.

We have wasted a great deal of time tonight on an issue which could have been settled in a very short time.

Question put, That the Bill be now read a Second time:—

The House divided: Ayes 50, Noes 0.

Mr. Bredemere, whose address is 6 O'Meara Street, London, S.E.1. I say at once that the right hon. Member for Bermondsey (Mr. Mellish), who is Mr. Bredemere's Member, has written to me saying that he willingly agrees that I should take up this matter, and I am grateful to him for giving me this opportunity to raise a typical example of the main subject matter of the debate we had earlier today.

It is salutary for the Minister to have to deal in particular with what he failed to deal with in general in that earlier debate. This is by no means the best or the worst case; it is fairly typical. It is first necessary for me to tell the House something about Mr. Bredemere and the effect that this refusal will have on his


business, and I can do no better than to read out his letter to me. It says:
We are a small company of roofing contractors, employing six men, two of whom are directly employed by the company, the other four being subcontractors. (That's full employment for six men.)
Since forming this company on the 15th October 1974, I have worked hard to make it a success. (Paying all the taxes, insurance contributions and VAT.) I started with one employee, working 14 hours a day, seven days a week. After one year I was able to rent a small office and employ two subcontractors. (My business was now beginning to progress.)
Since then I have moved from my small office, leasing a bigger office with a yard from the British Railways at an annual rent of £1,300·00 plus rates, I have bought two vehicles several hundreds of pounds worth of plant, and found further employment for yet three more men.
I enclose a photo-copy of a recent letter from H.M. Inspector of Taxes, Mr. Harris. After a long conversation on the telephone with Mr. Harris, regarding what I should do after the 6th April 1977. His advice was to close my business down, making my staff redundant. When we already have over One Million unemployed in this country at present it's ludicrous that I should have to add six men to that list, especially when our present order book will provide work for these six men well into 1977.
As you I'm sure will appreciate the state of limbo my company is in at present, unable to sign contracts, employ more staff etc., for fear of being unable to honour one's obligations after April 1977.
This country was built on small men thinking big, not small men thinking like idiots.

The facts of the case—and I have Mr. Bredemere's permission to give them—are that there are possibly two reasons why he has been refused a certificate. Many years ago he was an individual labour-only sub-contractor on his own, and he did what many did and probably worked for cash which was not declared. I do not know whether he has a sort of black mark against his name in the Revenue office, but many people have made mistakes in the past and I do not think it right, whatever may have happened in the past, that it should be held against him at this time.

In any case, Mr. Bredemere set about establishing himself, and he started his business. He has been for nearly three years now the proprietor of the business rather than a self-employed individual. In the process he has built up a considerable trade and has been paying tax at a far greater rate than he would otherwise

have been paying if he had not done that.

There is one disputed point which is conceivably a second reason for the refusal—a tax sum of £423·30 which is claimed by the Revenue for the year 1973–74. That sum has been in dispute between the Revenue and Mr. Bredemere's accountants and he has now more or less agreed that he has to pay it. But since he has not got a 714 certificate I do not believe that will encourage him or enable him to pay it, because it is hard to get work without a 714 certificate and it is hard to get money without work. We are back in a vicious spiral.

I chose this particular case out of many hundreds because it was neither a particularly glaring example where there might have been a mistake nor an example where it would be right to refuse a certificate. It is just a typical case.

This man had been refused without any chance that these matters can be aired in public because, if he went to appeal, the tax inspector would simply say that as there were tax irregularities the commissioners could not hear it. That is the most scandalous feature of the whole affair. Even if Mr. Bredemere did fail to pay taxes before he set up in business and even if he does owe £423, which has been disputed, there is no reason in either of those circumstances why he should not be granted a certificate to continue his business.

On many occasions the Financial Secretary has enunciated a new doctrine that one has to be a good taxpayer in order to have a licence to work. This does not apply to anyone else. If the Financial Secretary himself is a bad taxpayer and does not pay his own personal taxes until they are two or three years out of date, no one would say that he should resign from the Treasury, be put on the dole and be kicked out of this House. I do not see why the right hon. Gentleman should suggest that about Mr. Bredemere.

It is a most intolerable unfairness that the law of the land should apply to some people with severity when it does not apply to others. The factors that I believe to be at the bottom of the refusal are not such as to justify that refusal in any other profession, trade or business, or to cause a severe penalty such as the refusal


of a certificate to be meted out. That is inequitable.

The right hon. Gentleman might shelter behind the confidentiality of the Revenue. I can assure him that Mr. Bredemere is quite happy for his affairs to be discussed at this hour of the morning between the Financial Secretary and myself. It is apparently being done in secret, but that is not so because it will all be written down. Therefore, I should like the right hon. Gentleman to come clean about why a certificate was refused. It seems that we have no alternative but to raise these matters in the House because there is no way in which they can be heard before the commissioners.

There is no way in which the world outside can see that justice has been done, if indeed it has been done. It may have been done in the refusal of the certificate in respect of this citizen. If justice has not been done the world will be increasingly determined to amend this iniquitous system of 714 certificates. If justice has been done, at least it will have been seen to be done and Mr. Bredemere will know the reasons why this Government are seeking to take away his living.

12.40 a.m.

The Financial Secretary to the Treasury (Mr. Robert Sheldon): In the earlier debate we heard a great deal about the general case that a number of hon. Members made about the inequities, as they saw them, of the 714 certificate scheme. The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) was considerably more extreme than any of his hon. Friends.

Mr. Ridley: Rubbish!

Mr. Sheldon: If the hon Gentleman looks at Hansard tomorrow he will see a number of places where his tongue was not under complete control or, if it was, where he was guilty of making wild accusations against individuals in the Inland Revenue of a kind that none of his hon. Friends supported. In fact, they repudiated the hon. Gentleman. The hon. and learned Member for Dover and Deal (Mr. Rees), the hon. Member for Maldon (Mr. Wakeham) and others went out of their way to repudiate the hon. Gentleman's allegations. We were dealing then with the general case. The

House had the opportunity to vote, and it endorsed the Government's position.
The hon. Gentleman has now raised a particular case which he considers to be one illustration of the general case deployed earlier. He said that he selected it as giving a general view of the problems, as he saw them, over the whole area, as one illustration of the wickedness of the scheme and the problems it causes certain people, including Mr. Bredemere.
As the law stands, there is nothing I can do for Mr. Bredemere. The law prescribes certain conditions which we went into earlier. Mr. Bredemere does not satisfy those conditions.
The hon. Gentleman said that Mr. Bredemere's was a typical case, and that that was why he selected it, as not being particularly bad nor being at the other end of the spectrum of cases that have come to him. I do not think that it can be argued to be a typical case, because by far the majority of applications are approved. Out of 277,000 roughly 70 per cent. have been approved, 10 per cent. have been refused, and the others are waiting for a number of details or are being processed. This case is more typical of the 10 per cent. refused than of the 70 per cent. approved.
The hon. Gentleman said that Mr. Bredemere was a roofing contractor who had paid all his taxes and had been advised by the Inland Revenue to close down the business. I would consider that surprising, if not astonishing. The law prescribes the conditions that Mr. Bredemere must satisfy, and it is manifest that he has failed to satisfy them.
The hon. Gentleman said that having failed to satisfy the conditions, Mr. Bredemere cannot appeal. The fact is that this gentleman did appeal. He took the matter to the General Commissioners. I would have thought that this fact was so obviously part of the case that the hon. Member would have been fully informed on it at least, if not on the much more detailed and intricate aspects that he might have difficulty in pursuing. But this gentleman did appeal to the General Commissioners and they did not uphold his appeal.
The hon. Member might well say "Then he had to rely on the inspector's discretion." I have looked at this.


I have the papers that were made available to me, and I must say that I concur with the inspector's decision. I believe that the inspector, like so many inspectors with whom I have had dealings—and I believe that those Members who have been professionally connected with inspectors of taxes would concur—upheld the general standards of discretion, courtesy and conduct of inspectors, which are at a very high level. We must be very careful when making allegations directed against particular civil servants who do not have the ability or advantage of being able to defend themselves in the way that other members of society have, but who normally—the hon. Member will recall this from previous Finance Bill debates that we have had, in particular—are accorded, by those people who are knowledgeable, a high level of respect. This is a widespread view held among hon. Members of the civil servants concerned.
The hon. Member went into some detail on this matter, but nothing like the kind of detail that I have had available to me. I believe that I ought not to say very much more. I know that the hon. Member invites me to justify in detail the refusal of a certificate. He will know that on occasions we discuss certain individual's problems in debates, but I know of none—I have gone into this—which resembles the present instance.
In general, the question at issue relates to particular aspects that can be isolated. In this case however we are concerned with statutory conditions that cover the comprehensive history of a taxpayer's general record in tax matters. This obviously may properly be the subject of correspondence between the taxpayer's Member and the Treasury Minister. But what I do not think the House would ever wish to become involved in is the public dissection of an individual's private life and his relations with the tax authorities, even if the individual had indicated his acceptance of the ensuing publicity. The House, and certainly I, would find such a practice obnoxious, whether it served to justify the Government of the day or enabled an attack to be launched upon them.
What I am prepared to do is to give Mr. Bredemere a full account of why the

certificate was refused. Then he can do what he wishes about any subsequent publicity. What I feel is important is that the appeal procedures that I described in an earlier debate have been made available to the taxpayer and to others who are seeking to obtain certificates. I mentioned the various ways in which the procedure operates—I believe to the advantage of those who wish to apply for certificates and whose tax affairs might not be in complete order, and I showed how discretion is used.
It is very difficult to find that a case can be made to show that we are being unduly harsh. I gave a number of illustrations. Perhaps I may repeat them for the benefit of the hon. Member—who may not have followed them in the more tempestuous debate that took place earlier—and possibly for the advantage of Mr. Bredemere himself. The requirement for a person applying for a certificate is that he must bring his tax affairs up to date—this concerns the previous three years—and if he has looked after his tax affairs over that period, he will be granted a 714 certificate.
The hon. Member talked about tax in dispute relating to an earlier period, and he mentioned the requirement of being a good taxpayer. This is not a requirement. The requirement is that the applicant has met his obligations and that he is prepared to continue to meet the obligations which are implied in the granting of this status. Other taxpayers have to meet their obligations in the same way. If a taxpayer brings his tax affairs up to date, he can get a certificate. Inspectors may be prepared to give a certificate even if there is something in the applicant's accounts which is in dispute. If the dispute is genuine it need not delay the granting of a certificate.
I shall give the closest attention to any case which is brought to my notice. However, I do not accept the hon. Member's assertions throughout that the certificate is a work permit. Obviously there are clear advantages for sub-contractors who obtain certificates, and I am happy to do what I can to see that all those who are entitled to get them do so.
There has been considerable misunderstanding of the arrangements. There is no wish to attempt to avoid granting the certificates to people who meet the requirements. The task of the Inland


Revenue is not to harass taxpayers but to make sure that, as far as can be ascertained, it obtains taxes due, not only from the self-employed person himself, but from others working for or with the person who has the certificate in question. That is what the procedure is about, and that is the objective we intend to maintain.
I remind the hon Member—and I am not sure how far back his researches have taken him—that this has been a long and continuing area of evasion, and large sums of money have been lost to the Inland Revenue.

Mr. Ridley: Apart from traducing me, the Financial Secretary said he could not give a reason why Mr. Bredemere was not given a certificate. He now proceeds to tell us—it was dragged out of him—that the reason is that Mr. Bredemere has not brought his tax up to date. It is this total cloak and dagger secrecy which makes it intolerable for people who are trying to do the right thing.

Mr. Sheldon: The hon. Member is using his extreme language again. He knows very little about this case. I am not blaming him for that, but he gets angry on the basis of no knowledge. Mr. Bredemere has that knowledge, and he knows what is required of him. If he did not give that information to the hon. Member, I can understand that, but the relationship between Mr. Bredemere and the hon. Member is no concern of mine.
The information in this case is better discussed between Mr. Bredemere and the inspector of taxes, but I shall present some information to the hon. Gentleman and following upon that he can use it as he may wish. I advise him, however, not to demonstrate his hatred of a particular method of obtaining tax when that method reflects precisely the objectives of the previous Conservative Government when they sought to safeguard the revenue. He should try to find out something more about the companies and firms concerned. The information he has provided has been in a number of ways not only totally inadequate but misleading. I do not blame the hon. Gentleman for that, but it might do his cause a little more good if he carried out a filtering process on some of the information he received and if he proceeded with a little more moderation. I might then find his interventions

more useful in dealing with the cases he brings to my attention.
I interpret my position widely. I certainly intend to look closely at the working of the Act to ensure that, if changes are necessary, I am informed of that fact at the earliest moment. In the introduction of any new piece of legislation there must be someone responsible for a close and continuing observation of how the various practices are interpreted. I shall do that myself. Moreover, there is no alternative, bearing in mind the amounts of money at present being employed in operating the scheme introduced by the previous Government. The cost of that scheme in a direct result of their decision to proceed in this way. We are introducing a scheme which is cheaper to run, which will safeguard the revenue more effectively and which will ensure that there is as near as perfect an equity between the different taxpayers as it is possible to achieve within the limits of feasibility.
The change we are introducing is a consequence of our taking over the obligations entered into by the previous Government. I am therefore surprised that the hon. Gentleman did not question the actions of his Government. I had expected to see more activity by him in that direction when the scheme was introduced in 1972. He could have spoken against it then, but I have been unable to discover any opposition by him at that time. If he did not oppose the introduction of the scheme, I find it difficult to justify the course of action that he now finds necessary to take against a measure which is purely consequential upon the policy of his own Government.
I have this evening referred to the number of prosecutions which have been undertaken, and the success rate only shows what could have been achieved had more staff and facilities been made available.

Mr. Ridley: The hon. Gentleman is lecturing me with a priggishness which I find disgusting—

The Question having been proposed after Ten o'clock on Wednesday evening and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at One o'clock.